New data has emerged revealing Aussies are tightening the purse strings, switching to discount brands and borrowing less, as the economy sinks further amid the coronavirus crisis.
Overall spend per person has sunk 20 per cent below the ‘pre-pandemic’ normal last week, which is the lowest result since the start of the crisis in early March.
According to data from analytics firm AlpahBeta, part of Accenture and credit firm illion, spending on leisure, entertainment, cafes, and personal items was nearly a third lower than normal.
AlphaBeta director Andrew Charlton told The SMH Australia is seeing the positive effects of the government’s one-off stimulus of $750 start to wear off, exposing the economy to further “belt-tightening by consumers”.
AMP chief economist Shane Oliver said the figures on spending and the state of the economy may be even worse in the coming weeks.
“So far we haven’t had an avalanche of bad economic news but we’re about to go into a period when we do,” he said.
“If people hear more and more negative stories, especially about unemployment, that can affect confidence … the bad news can feed on itself.”
The real-time spending tracker tracks the buying patterns of thousands of consumers and businesses, with illion CEO Simon Bligh saying consumers are becoming thriftier.
As Australians try to figure out how to get through the worst of COVID-19, one strategy adopted by many households is to switch to discounted brands. Research by illion shows more shoppers have switched supermarket brands such as Aldi and Costco.
Meanwhile, Kmart and BigW have also gained market share, although that could be due to the temporary closure of Myer.
Furthermore, households are borrowing less with falls in new personal loans, home loans, credit cards and other forms of credit.
