Customers and retailers across Australia are expecting a solid Black Friday this year as spending remains resilient despite increased cost-of-living pressures.
Westpac data can reveal department store spending during the 2021 Black Friday period was 85 per cent higher in comparison to pre-pandemic levels in 2019, while sales at sports and toy stores rose by 54 per cent and vehicles rose by 19 per cent in the same period.
Spending with airlines (-49 per cent), travel agents (-44 per cent) and hotels (-12 per cent) decreased in 2021 relative to 2019. However, Westpac’s economists expect customers will turn this around over the festive season as it’s the first Christmas period in three years national and international borders have been open.
“Westpac’s business customers have told us they’re upbeat and ready for another solid sales season this Black Friday, especially as shoppers make the most of sales ahead of Christmas,” said Tania Motton, General Manager, Commercial Banking at Westpac.
“We know businesses are bolstering operations to capitalise on one of Australia’s biggest spending days, which includes extra stock and great deals, additional staff and delivery drivers, as well as ramping their digital marketing to stand out amongst the competition.
“The travel industry saw heavy spending declines last year in comparison to 2019 but with borders open and everyone able to visit family and friends as they choose, we expect this segment to significantly rebound this festive season.”
Besa Deda, Chief Economist, Westpac Business Bank, added: “Although consumer sentiment has been soft for much of this year, this pessimism has not transpired to a material pull back in consumer spending. Indeed, consumer spending growth has been robust, although there are some early signs of a slowing underway.
“2023 should see consumers more careful about spending, as the impact of higher mortgage rates and elevated inflation is felt. But before then, consumer spending should hold up, resulting in a busy Black Friday for retailers and consumers,” she said.
Department stores saw the most significant growth during the 2021 Black Friday sales when compared with the same period before the pandemic in 2019, while electrical appliances saw a 70 per cent increase, interior furnishings were up 31 per cent and clothing stores had a 16 per cent increase.
In good news for local businesses, new Westpac research shows almost four out of five (79 per cent) small and medium sized businesses have seen an increased customer interest in Australian owned and made products and services.
In addition, 81 per cent of small and medium sized businesses feel encouraged by their community and customer support for local businesses, leaving seven out of ten (69 per cent) businesses feeling optimistic about their current business environment.
With scams on the rise, customers are reminded to be vigilant this Black Friday and use a Digital Card through the Westpac app, which provides a dynamic 3-digit CVC code that changes every 24 hours. This reduces card fraud by 80 per cent and is used by approximately 13,000 customers each day.