MELBOURNE: Retailers will need to replace sales volume and "churn" with value for money to maximise the shrinking consumer dollar, according to a new report.
The Australian Centre for Retail Studies (ACRS) Consumer Climate Study found shoppers were adjusting their spending habits to accommodate the financial downturn. Expectations of a large increase in unemployment in the coming 12 months was also affecting spending, said ACRS research fellow Sean Sands.
"Where possible, consumers are saving whatever money they can or reducing debt. This has implications for the likely behaviour when people receive the next stimulus package payment."
The report indicated that 56 per cent of the stimulus package would be reinvested in the economy, with a possible 46 per cent in retail. From consumers' perspective, shopping for household items was the highest priority, followed by shopping for personal items, Sands said.
The survey also noted a reported trend toward private label brands, with 57 per cent making the move to that sector.
"While consumers are apprehensive about spending, this does not mean that they do not want to spend. Consumers require a 'reason' to spend; they need to see value in an offer and have a reason to part with their money. The days of profit through mere volume of sales are likely gone – retailers need to understand the consumer and what motivates them in order to get them into the store."
Key findings of the study, which covered 1010 consumers in all states across metro and regional areas, were: the financial downturn was having a clear impact on most Australians, although some optimism remained; almost 80 per cent of those sampled reported having changed their shopping habits as a result of financial pressures.
Around 70 per cent appeared to be cutting out more expensive items, with around 65 per cent reducing their overall spend.
However, consumer reactions towards the stimulus package were generally positive and a quarter of those surveyed confirmed they intended to spend more as a result of the package. About a quarter of the sample - 27.4 per cent - reported an intention to spend more as a result of the stimulus package.