Kiwis Cut Holiday Spending as Cost-of-Living Pressures Mount

As New Zealanders prepare for the holiday season, nearly half of shoppers indicate plans to reduce their spending, driven by rising cost-of-living pressures. According to research from buy-now-pay-later provider Afterpay, 46% of respondents aim to spend less this year, highlighting a significant shift in consumer behaviour during the traditional end-of-year retail period.

The findings from Afterpay’s Festive Forecast and Festive Lookback reports reveal that 35% of Kiwis feel stressed about holiday expenses. Katrina Konstas, Afterpay’s country manager for Australia and New Zealand, noted that consumers are becoming more strategic in their shopping approaches. “Cost-of-living pressures have made people much more strategic – shopping earlier, timing purchases around sales, and using flexible payment options to maintain control and budget effectively,” Konstas stated.

Shoppers Adjust Strategies for the Season

This year, Kiwis are starting their shopping earlier than ever, with 64% planning to complete most purchases between September and November. This behaviour marks the earliest recorded shopping patterns in Afterpay’s history. Over half of the respondents, specifically 52%, cited the desire to spread costs over time as a reason for early shopping, while a similar percentage aimed to alleviate last-minute holiday stress through advanced planning.

The trend towards discount hunting is also notable, with 48% of Kiwis waiting for sales before committing to significant purchases. This figure increases to 58% for experiences like travel or classes. In 2024, nearly 40% of Afterpay customers took advantage of deals during Black Friday and Cyber Monday, with November 29 identified as the most popular shopping day.

In terms of product preferences, self-care products are at the top of the list, with 74% of respondents indicating they plan to purchase these items. Additionally, 39% are looking for wellness products, while clothing and footwear remain strong contenders at 51%. Interior decor and toys are also popular, both attracting 34% of shoppers.

Spending Trends Reflect Consumer Caution

These insights come in the wake of recent data from Stats NZ, which indicated a decline in retail spending in September compared to August. Specifically, retail spending fell by 0.5% (equating to $34 million), breaking a three-month trend of increased spending. Core retail industries experienced a slightly smaller decrease of 0.4% ($25 million).

Mary Jo Vergara, a senior economist at Kiwibank, described the data as indicative of a cautious consumer climate. “Clearly, essential goods are taking up most of the budget. There’s been not a lot left over for discretionary spending, with households focusing primarily on grocery goods and services,” Vergara explained. She further noted that, when comparing the September quarter data to the previous year, durable goods saw a decline of 0.9%, while consumables increased by 3.6%. This trend illustrates how households are prioritizing their budgets.

As the holiday season approaches, the shift in spending patterns among Kiwis underscores the broader economic challenges facing consumers. The findings reflect not only a change in shopping habits but also a resilient spirit, as many remain determined to celebrate the season despite financial constraints.