25th November, 2022
Consumer sentiment in NZ appears to be taking more of a hit than in Australia, due to the pandemic and increasing cost pressures, new research shows.
With the lead up to the silly season well under way, we’re beginning to see how both the Australian and New Zealand markets are responding to a return to “normal” with a lack of major COVID-19 restrictions that have impacted consumer behaviour since the start of 2020.
Given that fact, there’s no doubt the holiday period will be a busy time with workplaces, friends and families spending time reconnecting as many wouldn’t have had that luxury since Christmas 2019.
But with rising cost pressures and the looming threat of recession weighing heavily on the minds of consumers in both countries, is consumer sentiment taking a hit as predicted by our October blog on the subject?
MYOB recently released findings from two consumer surveys of 1,000 people each in Australia and New Zealand, highlighting some key differences in attitudes between the two populations.
While cost of living pressures and the scale of impact from the pandemic have been largely similar in both countries, it’s worth noting that these factors could be playing a part in depressing consumer sentiment in NZ a little more than what we’re seeing in Australia.
MYOB’s Head of Go-to-Market Jo Tozer points out that, as more New Zealanders keep a closer eye on their festive season budgets this year, impacts may be felt by local businesses.
“While our research suggests spending will be comparable to 2021 on most levels, with the dollar not stretching as far this year — especially on essentials like food — it’s likely many families will be adjusting what their traditional festive celebrations entail.
“As a result, it could continue to be a challenging end of the year for some businesses who will feel this pinch more than others as discretionary spending is reassessed.”
The US shopping tradition dubbed Black Friday has been gaining in popularity as a tentpole moment to kick off the holiday sales period Down Under.
With the sales event due to officially begin today and continue through to ‘Cyber Monday’ (26 November), MYOB’s Australian consumer snapshot included some specific questions regarding shoppers’ attitudes to the sales event.
In fact, the survey found just over 63 percent of respondents intend to shop the Black Friday sales, with the 18-24 age bracket most likely to participate, at 88.4 percent.
This is an increase on last year, with just over 50 percent of respondents indicating they’d shopped the sales.
Not only do consumers plan on participating more than they had, they’re also hoping to find a bargain in the process. 37 percent of respondents said they expect retailers to be offering Black Friday discounts or offers.
At the same time, the enthusiasm for Black Friday deals might not have caught on in New Zealand with data from PriceSpy indicating 42 percent of Kiwis don’t plan on participating this year — an increase of 13 percent on last year.
“The cost-of-living crisis may well be holding some people back from planning to buy this Black Friday season, but there are also wider reasons at play,” New Zealand country manager for PriceSpy Liisa Matinvesi-Bassett told Stuff.co.nz.
Despite the lack of certainty as it comes to spend, there’s one thing that seems likely: shoppers are returning to physical retail experiences in droves — and that’s playing out in both Australia and New Zealand.
When asked where they intend to complete their Christmas shopping, 43 percent of Kiwi respondents indicated they would be visiting shopping centres to do most of their shopping, and 26 percent said they’d be shopping in-store with their local independent retailers.
In Australia, these numbers were even higher, with 53 percent planning to head to shopping centres and 45 percent from local independents.
Forty-five percent said they’d shop in-person at their local shops, 33 percent from large online retailers and 23 percent online from independent retailers.
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Dean Salakas, CEO of Sydney-based party supplies and costumes retailer The Party People, has been operating as a multichannel retailer for most of the past decade, having outgrown a pureplay online model.
According to Salakas, establishing his business online from the beginning made trading through multiple COVID-19 lockdowns easier, the return to in-store shopping has been a relief all the same.
“Our in-store sales are currently running about 20 percent higher than they were before the pandemic and I’m expecting that to grow throughout the holiday period,” he told us in a recent interview.
“There’s a real feeling that people are just excited to get back out there and celebrate with friends and family this year, and that should mean great news for retailers and hospitality business operators.”