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Sunday, January 24, 2021

COVID-19 fails to hamper Hunter spending habits

It appears as though the many challenges of COVID-19 haven’t hampered the buying habits of Hunter residents in the latter stages of 2020.

According to Newcastle Permanent’s latest Customer Spend Trend Report, it shows – despite or due to coronavirus impacts – continued shifts and growth in retail and consumer goods spending, as well as preferences at the end of the year, across the region, including Port Stephens.

“We identified the trends after analysing more than 4.6 million card transactions made by over 250,000 clients in the month of November 2020,” CEO Bernadette Inglis said.

“They were compared to November 2019 data and to spending patterns recorded during the NSW COVID-19 lockdown period of March/April this year.”

Notwithstanding the economic situation faced in 2020, Newcastle Permanent witnessed year-on-year expenditure growth from customers in November in the food and grocery, home improvement, retail goods, department store, entertainment and dining sectors.

“We’d expected that grocery spends had peaked during the COVID-19 bulk buying period but people spent over $5 million more at the supermarket in November than they did in the April/May lockdown period, which had already recorded a 37% lift when compared to November 2019,” chief customer and product officer James Cudmore said.

“Overall our customers spent an additional $40.5 million (19.5%) on goods and services in November than they did last November.”

Newcastle Permanent expects this trend to have likely continued into December, with shoppers embracing the online Black Friday and Cyber Monday opportunities and taking advantage of pre-Christmas sales.

“We’ve seen lifts across the majority of spending categories not only year-on-year, but also when compared to the lockdown period of April/May, when people bulk-purchased, undertook home improvement projects, set up their home offices,” Mr Cudmore said.

“Customer preferences have shifted significantly annually and been reshaped forever due to the pandemic’s influence on shopping habits, particularly when it came to the use of cash.

“The number of card transactions made by customers in November 2020 increased by 22% when compared to November 2019.

“This sharp rise in card usage year-on-year has been driven by the impacts of the pandemic, retail availability and the convenience and ease of digital banking.

“When we look at how our customers are using their cards, in the first 10 months of this year tap and pay transactions are up 7% compared to the same time last year, and online purchases up by 20%.”

In November, the trend of undertaking home improvements didn’t slow either.

“It seems Hunter people are still enjoying those projects with spending remaining high, particularly at stores like Bunnings, nurseries, home furnishing and decorating stores and for services like plumbers, electricians and appliance installation,” Mr Cudmore said.

“On the flip side, as expected, airline expenditure by our customers is still well below pre-pandemic levels with that spend representing just one third, which was recorded in November 2019.”

Among the other categories to post a weaker year-on-year purchase performance were fuel, new and used cars, cosmetics, travel agencies and cinemas.

Ms Inglis said the latest customer spend trends across regional NSW were encouraging.

“Overall, spending is positive when compared against the same time last year,” she explained.

“We expect this to continue through December/January as people continue to embrace the rolling back of COVID-19 restrictions, spend through the Christmas and New Year periods and move across the state and borders for Australian destination breaks this holidays.”

The next Customer Spend Trend Report will encompass the December/January period.

Additionally, in early 2021, Newcastle Permanent will collaborate with the University of Newcastle’s Hunter Research Foundation to enable ongoing research and data analysis of financial trends within the Hunter region.