A Tale of Uphill Struggles: 2024's Consumer and Retail Pressures

Australia's economy is currently a tale of uphill struggles. Cost-of-living pressures have taken a noticeable toll on Aussie consumers, and in turn, have impacted retailers in a significant way.

Paul Zahra, CEO of The Australian Retailers Association, stated in a recent media release, “Australians are desperate for financial relief, and so too are retailers. Business costs remain dangerously high without productivity improvements and discretionary spending is softening significantly in the wake of tightening household budgets.”

Treasurer Jim Chalmers has described helping Australians with the cost-of-living crisis as the government's "number one priority". Under the 2024 Federal Budget, the government has included several measures to provide Aussies with financial relief, including:

• Households to receive a $300 rebate on electricity bills, with small businesses seeing a $325 rebate.
• Rental assistance for low-income households is set to increase a further 10%, following on from last year's budget increase of 15%.
• There is also additional support for pensioners and mechanisms to reduce the cost of medicines.

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Is it enough to ease the pressures on everyday Australians and restore retail spending to healthier levels? Possibly not, considering that a report by the Real Estate Institute of Australia found the average household is now spending just under 48% of their income on home repayments.

At the same time, the cost of essential items has risen, adding even more strain to tightening wallets. While Coles announced an 8.4% decline in profit in its half-yearly results (1H24), Coles and Woolworths turned a 1H24 EBITDA of $1.85bn and $3.08bn, respectively.?For other retailers and small businesses, this?all translates to less available spend?for non-essential items.

While there are sure to be challenging times still ahead for retailers, there are still opportunities to gain share-of-wallet by doubling down on the shopper experience, connecting with shoppers on a more personalised level, and focusing on conversion rate optimisation (CRO).

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See Searchspring's recently released eBook - Elevating your website conversion rate in 2024 (and beyond) for more ideas, or message me for a copy.

https://searchspring.com/ebooks/elevating-you-website-conversion-rate-in-2024-and-beyond/

Also, check out ABC's 3-minute guide to how the federal budget will help Australians with the cost of living, including a pretty neat tax-cut calculator: https://www.abc.net.au/news/2024-05-14/whats-in-the-federal-budget-to-help-cost-of-living/103845728

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#CostOfLiving #FederalBudget #Ecommerce #OnlineRetail