Retail therapy boom: What Australians are buying amid a cost of living crunch

Lucrative end-of-financial-year sales contributed to a boost in online shopping, according to Australia Post's latest data. But spending habits have changed, with Australians making smaller and more frequent purchases.

End of financial year sales, which grew 4.4 per cent, contributed to the uptake in online shopping. Source: AAP / James Ross

Key Points

• Australia Post recorded a rise in online shopping since last year, partially due to sales and promotions.
• Shoppers are more savvy and comparing costs amid a cost of living crunch.
• An average 5.7 million Australian households shopped online each month this quarter.

An increased number of Australians are indulging in online shopping despite facing multiple cost-of-living pressures — but they're buying less.

Online purchases grew by 2 per cent in the 12 months leading up to June 2024, according to Australia Post's most recent quarterly report on online spending habits nationwide.

The data, released on Tuesday, said end-of-financial-year bargains helped boost online shopping, with EOFY sales up 4.4 per cent on last year.

Fashion and apparel were the most sought-after deals, with a 19 per cent rise in purchases compared to last year.

Australians also splurged on health, beauty, and recreational goods.

A similar EOFY trend was reflected in recent figures released by the Australian Bureau of Statistics (ABS), which found a retail rise of 0.6 per cent in May due to promotions and discounts.

Source: SBS News

ABS head of business statistics Robert Ewing said while early promotions lured in shoppers, retail spending remained stagnant and had risen only 1.5 per cent since May 2023.

"Retail businesses continue to rely on discounting and sales events to stimulate discretionary spending, following restrained spending in recent months," Ewing said.

Shrinking shopping baskets

More than 5.7 million Australian households purchased something online in the last quarter, but Australia Post revealed online baskets were shrinking.

Australia Post's post and parcel general manager Gary Starr said spending habits had changed, with smaller and more frequent purchases.

"We know shoppers are taking advantage of sales, managing the size of their baskets and using online shopping to help compare costs," he said.

Australians are wary of staying on budget, as they face increased costs on essential items such as food, rent and medical costs.

These volatile items are impacted by inflation, which rose 4 per cent in the 12 months to May, according to data released by the ABS in June.

State by state

According to Australia Post, Tasmania experienced the biggest rise in online shopping, with an 8.1 per cent increase year-on-year increase, followed by the Northern Territory (6.7 per cent) and Queensland (5.5 per cent)

South Australia had a 2.3 per cent increase while Western Australia had a 0.4 per cent increase. Purchases decreased in the ACT by 1.2 per cent, Victoria by 1 per cent and NSW by 0.3 per cent.