More evidence has been released showing it will be another tough year of retail trading.
The Australian Retailers Association (ARA) said consumer research from studies with Research Now and Shopworks Science revealed that over 50 per cent of the 800 consumers that were surveyed in February 2011 across Australia plans to spend less and over 45 per cent plan to save more.
ARA Executive Director Russell Zimmerman said the survey showed a clear trend towards saving and paying down debt rather than spending.
“Sobriety really is the new black,” he said.
“Since the GFC and throughout 2010 value-seeking consumers looking for sensible purchases meant tough trading conditions for retailers and this trend is expected to continue in 2011 and beyond.”
Zimmerman also blamed soaring electricity prices and the rise in prices of fruit and vegetables as a result of the floods for the tightened purses.
“Over 45 per cent of consumers said the increased cost of living in 2011 would tighten their budgets,” he said.
“New taxes have also spooked consumers with 30 percent saying they will spend less due to the anticipated flood levy.
“Paying off debt will also continue to be focus for prudent shoppers with a third of consumers planning on paying more than required off their credit card debt and almost 20 percent will pay more than their minimum mortgage repayments.”
According to Zimmerman, in order for retailers to survive the difficult retail period, they should consider multiple ways of reaching their consumers.
“Our advice to retailers is to try not to rely on heavy discounting alone to get consumers spending – shoppers need to see real value in whatever they are buying. Find out what your customers really want, communicate with them, get online, embrace multi-channel strategies,” he said.