Australians Trim Christmas Budgets Amid Living Costs

New research shows most households are adjusting spending plans as cost-of-living pressures impact holiday preparations.

Updated on Oct. 26, 2026 in Spending

Bold vector editorial illustration showing a single wrapped gift box beside a coin purse, representing budget-conscious holiday planning. — Australian households are curbing holiday expenditures as rising cost-of-living pressures lead many to prioritize financial management over traditional seasonal indulgence. AI Illustration. Upload story photo >

Live Poll

Are you planning to reduce your holiday spending this year compared to previous years?

Australian consumers are significantly scaling back their Christmas spending plans to navigate persistent cost-of-living pressures. A majority of households report they are actively adjusting their budgets for food, gifts, and home decorations this festive season.

Why it matters

Rising economic constraints are forcing a fundamental shift in seasonal consumption habits as Australians prioritise financial certainty over traditional holiday excess. This trend reflects a broader consumer move toward calculated, budget-conscious shopping ahead of key sales events.

Consumers report an average planned spend of AUD $518 on food and drink and AUD $487 on gifts. Overall, 79% of the 1,015 survey respondents are actively adjusting their holiday expenditures to cope with high living costs.

The players

Pureprofile

Pureprofile is a research and insights company that provides consumer data and analytics regarding market trends.

The details

Shoppers are increasingly relying on sales events like Black Friday to manage their holiday finances, with 58% of individuals planning to utilise these periods for their gift and supply purchases. Additionally, 20% of Australians intend to use AI tools to source the best deals during the lead-up to Christmas.

October 2026: Pureprofile released research findings regarding holiday spending plans.
Christmas 2026: The period for which consumer spending plans were surveyed.
2027: The year for which Australians are setting personal financial and wellness priorities.

Market Dynamics

The current consumer behaviour marks an intensification of the trends seen during the 2023 decline in planned gift spending. This indicates a sustained period of cautious financial management within the broader Australian retail market.

Retail investors should note that the shift toward AI-driven deal hunting and sales events may compress profit margins for traditional retailers this quarter. Households are also signalling a transition in 2027 priorities, with over half the population focusing on increased personal savings.

The takeaway

Consumers are increasingly using digital tools and strategic sales windows to protect their budgets against persistent inflation. Households aiming to manage costs should prioritise early planning and the use of discount periods to mitigate financial strain during the festive season.