Australian Consumers Determined To Shop Local During Covid-19 Pandemic
The recently published Consumer Sentiment Survey published by NAB illustrates that current economic uncertainty has caused many Australians to become more cautious with their spending.
This additional mindfulness in spending may deliver a benefit to Australian businesses. According to NAB, Australians are spending less, however consumers who participated in the survey gave response illustrating that they are more willing to shell out more money if it means shopping local.
Plunging rates of consumer confidence in NSW were offset by strong recoveries in other states, however, as Victoria recorded a jump of 15 percent, and Western Australia a rise of 11.5 percent, as each state came out of lockdown.
Generally, the majority of Australian consumers report choosing to buy less expensive products and doing their homework before deciding to make a purchase.
When asked how their behaviours had changed over the most recent quarter of 2021, 38 percent noted that they were buying more Australian-made products, while 35 percent admitted that they were supporting more local businesses.
Supporting local communities through consumer spending was on the rise before covid-19 hit, as there was a reported rise following the drought and bushfires of 2019.
However, with stress levels rising for the second straight quarter, whether shoppers will continue to pay more for local products is hard to predict.
Although consumers reported less anxiety over job security in Quarter 2 in comparison to Quarter 1, stress levels were up in relation to government policy, saving for retirement, health expenses, and the overall cost of living.
Low-income earners reported the greatest increase in regards to their finances. When look at the figures from a state by state perspective, Western Australians experienced the greatest surge in stress levels, while residents of NSW, the ACT and Victoria reported an increase as well.
Rising financial worries caused many Australia’s to rethink anticipated purchases. Participants in the survey expected to spend less on major household items, cars and investment properties in the near future.
However, despite mounting anxiety, one area where fears seem to have been somewhat allayed is in a willingness to be vaccinated against covid-19.
Almost eight in 10 Australians now intend to be vaccinated, or have already done so, and one in 10 reported being unsure. Last quarter, almost one in five said that uncertainty was preventing them from receiving the covid-19 vaccine.
Consumer Sentiment Plunges In NSW As It Remains Firm In The Rest Of Australia
Consumer concerns related to the NSW Government’s latest lockdown for Greater Sydney have yet to spill out into other states, in contrast to similar conditions seen under similar lockdown conditions in Victoria through August of 2020.
The Westpac-Melbourne Institute Index of Consumer Sentiment rose by 1.5 percent to 108.8 in July, up from 107.2 in June, even as the state of New South Wales was thrust into preliminary lockdown in early July.
The survey conducted over a 4-day period during the first week of July shows that consumer confidence has continued to grow nationwide, despite a sharp fall in NSW, as other states like Victoria and Western Australia recover from covid-19 related disruptions in June.
The main takeaway from the survey results is that concerns around the current virus outbreak and associated restrictions in NSW are not spilling over to the rest of the country. This contrasts with Victoria’s ‘second wave’ outbreak in August last year which weighed heavily on sentiment across the rest of the country.
The increase in consumer confidence for June follows a 9.8 percent drop over the last two months, from April to June, that hinged on concerns and weakness in Victoria, which dropped by a total of 16 percent, and Western Australia, down by 18 per cent, after a period of lockdowns.
Meanwhile, consumer confidence in NSW remained steady over the same period, before the pattern was reversed in July following a surge in covid-19 cases and the introduction of lockdown measures, according to the survey.
The report notes that Sydney’s lockdown restrictions hit consumer confidence hard, as the state index dropped by 10.2 percent, while Sydney saw a 13.6 percent fall.
