The Christmas cheer is returning in 2025 as Deloitte data predicts a 14 per cent lift in average consumer spending this year. But it also shows consumers will hunt for good deals.
Deloitte’s Retail Holiday Report 2025 surveyed 150 Australian retail executives and 1,000 customers, covering sentiment over the November to Boxing Day holiday trading period.
The results indicate shoppers will spend an average $1,140 per person this year, with 84 per cent of retailers expecting stronger sales. The latter is up from 51 per cent recorded for the 2024 holiday period.
Despite the bump up in average spend, many consumers have ranked 'value for money' as the most important factor in their purchasing this year. This indicates customers may look to November sales events like Black Friday and Cyber Monday to bulk up on Christmas gifts.
Those in households earning between $150,000 to $249,999 have the highest share of people listing 'value for money' as a key shopping priority, at 31 per cent, while 30 per cent of those in households earnings less than $50,000 have it as a top priority.
Meanwhile, more than half (57 per cent) of shoppers expect to make at least 20 per cent of their purchases online – up from 43 per cent in 2024. The report also suggested that much of this online spending could be done on Chinese online marketplaces like Shein and Temu.
“In this environment, pricing and promotional strategy remains front and centre,” the report read. “More than a third of consumers (34 per cent) say they are likely to switch brands for a better deal, rising to 42 per cent for those under 35, and a striking 55 per cent among experiential shoppers.
“Clearly, retailers need to deliver both an exceptional experience and a good deal.”
Deloitte consumer products and retail partner Damien Cork said consumer optimism overall is rebounding amid more favourable economic conditions, which means retailers can look forward to some Christmas cheer.
“However, cost of living pressures are slow to ease,” Cork warned. “Australian shoppers remain price-sensitive and on the lookout for a deal. While most plan to maintain or increase spending, only 15 per cent say they feel financially confident.
Cork added that retailers aiming for strong revenue at the end of 2025 will be leaning into November sales events. For the first time since this survey began 14 years ago, retailers now expect to generate 50 per cent of their holiday revenue through this period.
“At the same time, retailers shouldn’t forget the power of the store,” Cork added. “Providing high-quality and convenient in-store experiences that are well integrated with the e-commerce function is key to capturing the hearts and wallets of shoppers in the face of cut-price overseas online platforms.”
The Australian Retailers Association (ARA) CEO Chris Rodwell shared his thoughts in the report, noting that green shoots are emerging within an array of ongoing challenges.
“Retail sales edged upward in the first half of 2025 compared to the 2.8 per cent annual average recorded in 2024 – rising to a high of 4.9 per cent year-on-year growth in June, according to the Australian Bureau of Statistics,” Rodwell shared, adding that online retail also continues its steady rise.
“While the Reserve Bank’s interest rate cuts have taken time to land, this year’s modest rate cuts will help bolster confidence in the lead-in to the peak season. Hopefully, they will also lift spend on higher value items.
“But interest rates are only part of the story. Retailers have been battling higher costs of doing business across the board – rents have spiked, we’ve seen significant wage rises, along with higher energy, insurance and supply chain costs and, unfortunately, an intense retail crime wave.”
Rodwell said the ARA and the National Retail Association – soon to merge as the Australian Retail Council – continue to advocate for national leadership on economic reform with red-tape reductions and the stamping out of retail crime being the key measures they want.
“As Australia charts a course toward economic recovery, retail remains a bellwether for national confidence,” he wrote. “Despite ongoing headwinds, with the right policy settings and stronger collaboration across governments, retail can lead the nation’s resurgence.”