Tax refunds largely bypassed retailers last year
The Federal Government’s tax cut bill, aiming to award tax relief of up to $1080 to Australians earning under $126,000, was poised to be a “present” for retailers according to the National Retail Association.
However, research from Money.com.au has found that this present never quite arrived, with only 5 per cent of respondents spending their tax refund at a retailer.
The majority of people used their refund to restore depleted savings (33 per cent) or paid bills (28 per cent).
“In previous years people would spend their tax return on retail and leisure, but the findings reveal that the majority of us are struggling and are anticipating that the hard times will continue,” said Money.com.au spokesperson and licensed financial advisor Helen Baker.
“As such, the tax refunds are simple helping us get by now – helping us to catch up where we were behind, or help us in the future.”
The beginning of 2020 has been particularly difficult for Australian retail, with a number of high profile voluntary administrations, store closures, and disappointing results over the Christmas period seen in many corners of the industry.
And while negative sentiment due to the bushfires and coronavirus outbreak can be blamed for a part of this, the fact remains that with a lack of wage growth and rising cost of living people are just not spending as much.
Last week, the Australian Bureau of Statistics said retail spend during December had fallen on November’s results likely due to the smoke haze, as well as the success of shopping event Black Friday.
National Retail Association chief executive Dominique Lamb said the figures were reflective of the new normal.
“The shopping behaviour of Australian consumers is always changing, and this is best exemplified by the clear shift we’ve seen when it comes to making Christmas purchases,” she said.
“The important takeout for retailers is to be aware of this shift and understand it is likely to only become more pronounced in future years. Businesses should look to tailor their Christmas strategies to the last weekend of November, which is bookended by Black Friday and Cyber Monday.”