Cost of living hikes will see Australians buying fewer gifts this Christmas as families work within narrower budgets when compared to previous years, new research by global data and insights company, Pureprofile has revealed.

Pureprofile’s 2022 Christmas Report shows that Australians are regaining their pre-pandemic festive spirit, with 57% feeling emotionally positive about the season; a slow catch up to 65% from 2019. Spending habits are yet to catch up with pre-Covid levels with Australians reporting that they are unable to spend lavishly on gifts. In fact, three in five mention they will spend less on gifts this year compared to the previous year.

Australians are prioritising who and what is most important to them. Buying fewer gifts is the top measure people are adopting (58%) as a way to stay on budget, with nearly one in four (24%) choosing to only buy gifts for their children this Christmas.

This year, the average Christmas budget sits at $425 for gifts ($5 less than last year) while the average food budget has decreased from $310 in 2021 to $302 this year, with 37% claiming they will spend less on food this year, compared to 28% who said the same in 2021.

Pureprofile CEO, Martin Filz said, “Despite the current economic climate, Christmas is still an important holiday to Australians and we can see that many are resiliently holding on to what’s most important to them, as they did during the pandemic.

“The rising cost of living has led to a true narrowing of priorities with many planning to only spend on necessary items, such as gifts for children. It will be a testing time for retailers who need to think of creative ways to cater to these smaller budgets and rearranged priorities. Value for money and unique selling propositions will need to take centre stage as more Australians look to snag a worthy deal during the gift-giving process.”

As it was with last year, more Australians are choosing to do their Christmas shopping early, with 72% saying they will shop before December, up from 69% last year and 65% in 2019.

Gift cards are the top choice when gifting, with almost one in two (47%) Australians planning to buy them for others, followed by food, confectionery & drinks and clothes (32%). However, clothes are slowly losing popularity, along with books and toys.