After a few years of feeling more like the Grinch than Santa, Australian retailers can finally hang the tinsel with a bit of optimism. Deloitte’s 2025 Retail Holiday Report has dropped, and the numbers suggest the worst of the retail chill might be thawing just in time for Christmas.

Consumers are loosening the purse strings. Average spending is tipped to jump nearly 14 per cent this holiday season, landing at about $1,140 per person. Better still, 84 per cent of retailers expect sales growth, compared to just half last year

That’s a big mood shift. Before you start counting the cash, the report makes one thing clear: Aussies are still bargain hunters at heart.

Black Friday is stealing Santa’s thunder

The festive season used to mean Boxing Day madness at the shops. Not anymore. For the first time since Deloitte started tracking this data, retailers expect to pull in half their holiday revenue during November’s mega-sales: Click Frenzy, Black Friday, and Cyber Monday.

If you’re a small retailer, this is your signal to get organised early. Shoppers are primed to spend big before December even rolls around. That means prepping your promotions now, testing your online store and making sure your fulfilment processes can handle the rush. Leave it too late and you’ll miss the sleigh.

Shoppers want experiences, not just stuff

It’s not all socks and jocks for Dad and scented candles for Mum this year. Spending on experiences such as holidays, concerts and fine dining is tipped to leap nearly 30 per cent, compared to just a 4 per cent bump in gifts.

That shift should have small businesses thinking beyond the product. Could you bundle an ‘experience’ around what you sell? Cafés might create Christmas tasting menus. Retailers could host in-store events or workshops. The key is finding ways to tap into that growing appetite for memories, not just material things.

The rise of the bargain-savvy, brand-agnostic Aussie

One-third of consumers plan to spend more this year, led by younger Aussies (59 per cent of those aged 18–24) and blue-collar workers (38 per cent). The days of brand loyalty also seem to be waning: 34 per cent say they’ll happily switch brands if it means getting a better deal, and that figure jumps to 42 per cent for under-35s.

For small businesses, price matters, but so does experience. If you can’t beat the big players on cost, you’ll need to double down on service, convenience and connection. The store that remembers your name, throws in a surprise gift, or makes checkout a breeze is the one customers will come back to.

The not-so-silent night of online marketplaces

Chinese online marketplaces like Temu and Shein are storming Aussie shopping carts, especially among Gen Z, with almost half saying they’ll buy from these platforms this season.

So what’s their appeal? Rock-bottom prices and rapid delivery.

That doesn’t mean small retailers are doomed, but you do need to sharpen your edge. Deloitte Partner Damien Cork says small businesses need to lean into their local advantage: faster pick-up, face-to-face service, products with a story behind them.

“Providing high-quality and convenient in-store experiences that are well integrated with the eCommerce function is key to capturing the hearts and wallets of shoppers in the face of cut-price overseas online platforms,” said Cork.

AI elves are already in the workshop

Artificial Intelligence is creeping into everyday retail. Forty-one per cent of retailers are already using AI across their business, whether that’s smarter stock forecasting, personalised online shopping suggestions, or even AI theft detection.

Small businesses don’t need to dive into complex systems overnight. Even free or low-cost AI tools can help you punch above your weight. AI-driven email marketing, personalised product recommendations, or chatbots that answer customer questions while you’re serving in-store are all valuable tools to consider.

Crime and punishment: the darker side of retail

It’s not all Christmas cheer. Retail crime is on the rise, costing local businesses over $9 billion in 2024.

Nearly half of retailers say they’ve seen a spike in theft, fraud, and even violent incidents in stores. Small shops are especially vulnerable as they don’t have the budget for extra security staff or high-tech systems.

However, you can take some practical steps to ensure safety. Train staff in conflict resolution, install affordable CCTV or theft-prevention tech, and make sure store layouts are designed for visibility. Customers value feeling safe as much as staff do. And in the age of social media, a single incident can hurt a brand’s reputation fast.

What 2026 could look like

The good news is this positive trend isn’t a one-off sugar rush. Deloitte expects consumer confidence and retail growth to keep climbing into 2026, thanks to falling interest rates and rising wages.

About three in four retailers reckon consumer confidence will improve over the next 12 months, which is a massive jump from the grim one-in-ten who thought so back in 2023.

That means small businesses should be thinking long-term. If you’ve been stuck in survival mode, now’s the time to plan for growth. Tighten your promotions strategy, invest in tech that makes life easier for both staff and shoppers, and keep an eye on where your customers are actually spending their money.

Aussies are ready to spend, are you ready for them?

This Christmas, Aussies are ready to spend again. However, they’ll be looking for value, speed and great experiences. November is now just as important as December, online and offline need to work hand-in-hand, and AI is fast becoming the new retail assistant.

If you can balance sharp pricing with memorable service, keep your security and systems in check, and stay nimble enough to respond to changing behaviour, your business will thrive.

“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, “ concludes Cork.

Need more tips to get your sales season sorted? Join our free masterclass, Small Business Secrets to Smashing Sales Season with eCommerce expert Paul Waddy. Register now.

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