Out with the booze, in with technology – how consumer spending is shifting

Consumer spending habits are trending away from cigarettes, alcohol and gambling, with Australians increasingly putting their money towards purchases such as computers and insurance, a new report has found.

The latest consumer spending report from CommSec, using Bureau of Statistics figures, revealed a 52.8% growth in household spending on computers in the June quarter, compared with the same period last year.

Cars, with a 22.7% increase, was the second largest growth area, although CommSec put this down to government stimulus and last year’s government tax break on businesses equipment purchases, such as vehicles.

Rail transport, watches, jewellery and hotel accommodation also saw rises, with Australians also spending increasing amounts on insurance. Spending on life insurance and superannuation rose 7.5%, outlay on motor vehicle insurance jumped 7.4% and health insurance spending lifted by 6.4%.

On the other end of the scale, consumers are spending less on cigarettes, alcohol and gambling. The steepest like-for-like decrease was a 3.8% dip on electricity and gas spending. Tools and equipment spending was down by 3%, petrol was down 2.4% and doctors and medical services slipped by 2%.

CommSec said that the reduction in car use and trips to the doctor signalled a new ‘healthier Australia’, pointing to a 15% rise in sporting and recreational services.

Spending on ‘essentials’ such as food, clothing and household items fell to a record low in the June quarter, accounting for just 33.5% of all household spending.

CommSec said: “The latest spending data is actually good news for retailers. Provided they follow consumer trends closely, hit their ‘hot buttons’, and keep prices low, then consumers will spend.”