General spending of South Australians is anticipated to decline over the next 6 months, yet there are positive signs, based on Square Holes’ latest Mind & Mood survey at the end of June. South Australians aged under 50 more likely to expect their spending to increase in some areas, and those over 50 are switching travel plans to from overseas to South Australia.
One in three South Australians anticipate their grocery shopping to be more over the next 6 months, and 8% less, with a net growth of 25%. Other general shopping is anticipated to have those spending more, balanced by those spending less.
Spending on travel, larger items such as cars and home renovations, technology, clothing and fashion and donations to charities are all expected to have a net decline in overall spending in the next 6 months.
Grocery and food shopping was the only area of spending consistently expected to increase across age groups, with particularly strong increases for 35-49 year olds (40% expected to spend more, and only 3% less).
In contrast, travel, charity donations and large items such as cars and renovations were expected to see net lower levels of spending over in the next 6 months compared with the last six months. Spending was anticipated to decline more for South Australians aged 50+ than younger age groups.
While only around 5% of 50 plus year olds expected to be spending more on donations, over 30% expected that they would spend less. A likely concerning warning sign for a sector typically receiving a large proportion of donations from South Australians aged over 50. A sense of loss of financial insecurity is meaning many South Australians are cautious about their spending.
An strong decline in spending was anticipated for larger items such as cars and renovations, with only a small proportion anticipating spending more and a large proportion planning to spend less than the last six months. Travel is also an area seeing financial tightening.
It is interesting to note, however, that while South Australians are anticipating an overall decline in travel spending, but there is a plan to swap overseas travel for local. The largest appetite for travel in South Australia is from 50-64 year olds (48% plan in next 6 months), followed by 65+ year olds (37%).
South Australians aged 18-49 are more likely to intend to be in the market for a new car. Overseas travel, home renovations and real estate are not so popular at this moment in time.
Intention to travel in South Australia has increased since previously asked in the April 2020 Mind and Mood Survey (April 28% > June 39%). Travel in Australia has also increased but much less (April 18% > June 25%), while intention to travel overseas has decreased slightly (April 8% > June 7%).
New car plans increased and home renovations and real estate have been low in both surveys.
With a declining sense of financial security from themselves and the wider economy spending is tightening. While likely expected, it does provide caution for businesses hoping for a quick economic recovery. Likely the rewards will come from businesses driving revenue through understanding their customers and potential customers and thinking laterally. Who are the customers most likely to shop with us, and how can we attract more of them?