From Black Friday to Boxing Day, Optimism Returns

18 September 2025: After a long and cold retail winter, the warmth of Christmas cheer is returning to the hearts of Australian shoppers. Falling interest rates and easing cost of living pressures mean consumers expect to spend nearly 14% more this holiday season, averaging $1,140 per person.

That’s according to the 14th edition of Deloitte’s annual Retail Holiday Report, which surveyed 150 Australian retail executives and 1,000 consumers, capturing sentiment towards the November to Boxing Day holiday trading period, as well as the key trends shaping 2026

The survey found a sharp rise in sentiment: 84% of retailers expect stronger sales this year, up from 51% in 2024. And while one in three shoppers plan to spend more, many will look to stretch their dollars further by bargain hunting during November sales events or turning to Chinese online marketplaces – a growing competitive threat for Australian retailers.

Deloitte Consumer Products & Retail Partner Damien Cork said: “Retailers have had more than a few blue Christmases, with the sector battling recession-like conditions for years. Now, with consumer optimism rebounding amid more favourable economic conditions, retailers can look forward to some Christmas cheer.”

“However, cost of living pressures are slow to ease. Australian shoppers remain price-sensitive and on the lookout for a deal. While most plan to maintain or increase spending, only 15% say they feel financially confident.

“Retailers hoping to make the most of the all-important holiday trading period will be leaning into the marquee November sales events of Click Frenzy, Black Friday and Cyber Monday, when value-conscious consumers are increasingly getting their shopping done. For the first time since this survey began, retailers expect to generate 50% of their holiday revenue through this period.

“At the same time, retailers shouldn’t forget the power of the store. Providing high-quality and convenient in-store experiences that are well integrated with the e-commerce function is key to capturing the hearts and wallets of shoppers in the face of cut-price overseas online platforms.”  

 Key retailer findings:

• Most retailers (84%) expect sales growth from last season, compared to only 51% in 2024.
• Most expect either stable or modest sales growth, with 51% forecasting growth of up to 5% and one-third forecasting growth over 5%.
• Retailers expect to generate half of their holiday revenue through Click Frenzy, Black Friday and Cyber Monday combined, but Christmas and Boxing Day are still expected to deliver the most sales on their own.

Key consumer findings:

• 33% of consumers expect to spend more than they did last year (up from 24% in 2024), with Australians aged 18–24 (59%) and blue-collar workers (38%) leading the charge back to the checkout.
• 43% of all respondents say they are planning to maintain their spending levels. Higher-earning households are more likely to increase spending, while households earning under $50,000 continue to feel the pinch with 34% saying they’ll spend less (compared to 24% overall).
• More than a third of consumers (34%) say they are likely to switch brands for a better deal, rising to 42% for those under 35. 

Confident consumers shift spend to experiences

One of the factors set to lift shopper holiday spend is a renewed focus on experiences, like holidays, over gifts. Spending on gifts is set to increase by just 4.2% while spending on experiences is set to leap by almost 30%.

Consumer survey: How much do you expect to spend on the following categories these holidays?

Harsha Maddipatla, Retail Strategy Partner at Monitor Deloitte said: “The summer holiday was more of a luxury last year – but this year Aussies are feeling more confident and looking to get out and about in a big way.”

Cost sensitivity is also doing its part in accelerating a shift towards online shopping, particularly among younger consumers: Around two in five Gen Zs (44%) and 25–34-year-olds (41%) say they are more likely to shop with Chinese online marketplaces this year, drawn by low prices, vast selection and fast delivery.

Maddipatla continued: “Online shopping is here to stay, but it is not all the consumer wants. Physical stores continue to play a vital role in retail, serving as hubs for service, discovery and fulfilment. Shoppers now move fluidly between channels, browsing online, testing or collecting in-store, and finalising purchases on their phones.

“Expectations have shifted. Consumers are no longer shopping by channel; they are shopping by experience. They are also willing to spend for the right reason, with 68% of consumers saying obtaining the exact product they want is important, even if it means paying full price.”

And what might 2026 have in store?

With interest rates on the way down, wages on the way up and cost pressures easing, the retail sector is poised to return to growth in 2026. Whilst consumer sentiment hasn’t completely shed last year’s pessimism, things are turning around fast: 32% of consumers feel optimistic about their financial outlook over the next 12 months, up from 26% in 2024.

Retailers can feel the change. More than 80% expect sales growth and around three in four (74%) expect consumer confidence to improve over the next 12 months, up from 41% in 2024 and just 10% in 2023. In a double dose of good news, cost pressures are also easing, with 24% of retailers citing them as their greatest risk, compared to almost 40% in 2024.

On the flip side, competition is intensifying: 35% of retailers now cite existing competitors as their top risk, slightly up from last year (34%) and significantly higher than in 2023 (5%). Artificial Intelligence (AI) is emerging as a key tool enabling efficiency, with 41% of retailers mainstreaming it across their business. Elsewhere, crime is a mounting concern, with nearly half of all retailers reporting a rise in shrinkage due to theft, fraud and error.

Maddipatla added: “Although sentiment is on the rise, businesses are under increasing pressure to perform in a highly competitive market shaped by persistent price sensitivity. AI is already giving retailers a strategic edge, particularly across marketing, e-commerce and supply chain functions. If you’re not using it now, you’re already behind.

Cork concluded: “Success in 2026 will depend on striking the right balance between customer experience and pricing strategy. Retailers will need to fine-tune the timing of promotions, protect margins and adapt quickly to changing consumer behaviour to win the day.”