Shopify buyers in Australia rose 16.9% this EOFY, but overall retail growth ran below inflation and spending only held because promotions pulled it forward. Cost of living has trained shoppers to wait for the sale. Discount dependence erodes margin one event at a time.
Cost of living did not kill the spend. It trained people to wait for the sale. That is a habit, and habits are hard to unwind.
Australians did not stop spending this end of financial year. They just waited for the discount. Shopify data shows the number of Australians buying from its merchants rose 16.9% year on year in June, with clothing, personal care and healthcare leading the categories. World Cup fever gave soccer gear a lift. On the surface, that reads as resilience.
Look wider and it is more complicated. The Australian Retail Council and Roy Morgan forecast EOFY spending to reach around $10.7 billion, but growth of just 1.9%, well below inflation. Around 6.1 million Australians, roughly a quarter of adults, planned to shop the sales. About three million who spent last year sat this one out. Spending held, but only because the promotional event pulled it forward and concentrated it.
The age split is telling. Shoppers aged 35 to 49 planned to spend the least, averaging around $1,464, less than both the under 35s at $1,946 and the 50 to 64s at $1,993. The squeezed middle, mortgages and kids, is where the caution shows up hardest.
Why it matters
If your customers are increasingly only buying on promotion, your margin is being conditioned away one sale event at a time. Volume that only shows up at a discount is not the same as healthy demand. It is demand you are renting back from your own customers at a lower price.
Year on year rise in Australians buying from Shopify merchants this EOFY, even as overall retail growth ran below inflation. Source: RetailBiz, Roy Morgan.
The businesses that lean entirely on discount events to hit their numbers are building a customer base that will not buy at full price. That works until it does not.
What to do about it
Spending held this EOFY. The question for the rest of the year is whether your customers still remember how to buy without a red sticker on it.