Post-Black Friday Slump Hits Australian Spending in December

January 15, 2025 — Australian household spending experienced a significant downturn in December 2024, falling by 1.8 per cent according to the latest CommBank Household Spending Insights (HSI) Index. This decline follows a surge in spending during the Black Friday sales period in November, suggesting consumers brought forward their Christmas shopping to capitalise on discounts.

The HSI Index revealed a sharp 8.3 per cent drop in spending on Household Goods, including clothing and department store items. This was attributed to consumers having already made their purchases during the November sales. Other sectors experiencing declines included Hospitality (-2.6 per cent), Food & Beverage Goods (-2.0 per cent), and Recreation (-2.0 per cent).

Conversely, some areas saw increased spending in December. Utilities spending rose by 4.9 per cent, largely driven by strata management fees. Comms & Digital spending also saw a modest increase of 1.2 per cent, along with Transport, which rose by 0.7 per cent.

CBA Chief Economist Stephen Halmarick commented, “The fall in household spending in December and subdued growth throughout 2024 emphasises that the consumer remains cautious. As we’ve seen in past years, sales spending on items like household goods was brought forward to October and November to take advantage of Black Friday sales promotions, which resulted in a drop in December.”

Despite the December dip, the annual HSI growth rate rose to 5.2 per cent in 2024. The strongest performing categories over the year were Insurance (+11.5 per cent), Communications and Digital (+10 per cent), Health (+9.4 per cent), and Recreation (+7.3 per cent). Transport was the only category to experience a decline over the year, falling by 0.7 per cent.

The report also highlighted spending variations across different housing demographics. Homeowners with a mortgage increased their spending by 3.8 per cent over the year, outpacing those who own their homes outright, who saw a 2.8 per cent increase. Renters remained the weakest spenders, with annual growth of just 2.4 per cent.

Mr. Halmarick added, “The weakness in spending in December, combined with the improving inflation environment, supports our view that the RBA can begin to lower interest rates at the first meeting of the year in February. We expect 100bp of monetary policy easing through 2025.”

The CommBank HSI Index is based on de-identified payments data from approximately 7 million CBA customers, representing roughly 30 per cent of all Australian consumer transactions, providing a comprehensive overview of national spending trends.

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