Inflation ranks overwhelmingly as the number one risk that Australians think could impact the country over the next year, according to a new PwC survey.
The Voice of the Consumer survey showed almost three quarters (72%) of Australians ranked inflation in their top three concerns, and 40% ranked it number one, notably higher than global counterparts including the US, Germany and France.
About half of Australian consumers (48%) are actively searching for better value for money – more willing to delay purchase decisions while they shop around, compare products, purchase through alternative channels, and trade down for cheaper alternatives.
More than two-thirds (68%) say they are willing to pay more for a product with a lower carbon footprint, while three quarters (76%) are willing to pay more for locally produced/sourced products. However, only 10% would be willing to pay a premium of 20% or above.
Three in five (62%) Australian consumers say social media advertising sways their spending, ahead of retailer websites, email ads, and text messages. However, more than half (56%) of Australians say they are not comfortable purchasing through social media and 39% say they have had a bad experience purchasing through social media.
PwC retail and industry consumer leader, Brian Man said, “It’s been a tough few years for Australian households with a lot of people asking, has consumer sentiment bottomed out? We would say it’s too soon to call. Our research shows people are being careful about how they make purchase decisions.
“Our data paints a picture of how the cost-of-living crunch is shifting some of the fundamental ways Australians shop. While values-alignment is still important to consumers, our research shows us that affordability is paramount in 2024 – only 10% of consumers would be willing to pay a premium of 20% or above for ethically sourced products.”
Speaking specifically to the household goods category, Man added: “This is an interesting category as it falls somewhere between a discretionary and non-discretionary expense. Sales are sluggish, but not as bad as apparel retailers, for instance.
“We anticipate the household goods category will rebound quite quickly once the economy turns. History tells us that when there is an economic windfall, people are likely to splash out on appliances and electronics. The boom in TV sales when the Baby Bonus policy was in place was a good example of this.
“We also expect the rebound in Australia will be quicker than other markets. Compared to other countries, Australians love to invest in their houses, and in turn, the appliances they keep in them.”