Budget-conscious shoppers are putting the brakes on their spending at the supermarkets and when buying food online, with discount retailer Aldi tipped to capitalise as consumers push to stretch their dollar further.
As Australian households adjust to higher interest rates, their overall spending is starting to moderate. Spending data of more than 300,000 Australians, tracked by fintech Beforepay, which offers people an advance on their salary before payday, shows spending dropped by 29 per cent in September across all household categories measured in the survey.
Meanwhile, daily spend on groceries dropped by 19 per cent over the same period. The average daily spending on groceries was $15.20 per person in September, compared to $18.59 last month.
With another interest rate hike scheduled to land in October, and grocery prices tipped to edge up by the end of the year, analysts at Jarden said the shift in consumer behaviour should favour a retailer like Aldi.
“The value shopper is returning and Aldi is forecast to be the second-fastest growing retailer over the next 12 months, with Woolworths number one,” analyst Ben Gilbert wrote in a report to clients.
Recent consumer surveys carried out by investment bank UBS, also suggest that higher costs are starting to weigh down lower income earners, as food, fuel and power bills take up a bigger slice of their take-home pay.
Grocery operators are in a better position, compared to homewares retailers and those selling “discretionary products”, to weather the slowdown, Jarden analysts said.
“We remain cautious on the outlook for the consumer and believe staples and fast-moving consumer goods should perform well against this backdrop.”