Falling interest rates and easing cost of living pressures mean consumers expect to spend nearly 14 per cent more this holiday season, averaging $1140 per person.

That’s according to Deloitte’s annual Retail Holiday Report, which surveyed 150 Australian retail executives and 1000 consumers, capturing sentiment towards the November to Boxing Day holiday trading period, as well as the key trends shaping 2026.

One of the factors predicted to lift shopper spending is a renewed focus on experiences, such as holidays, over gifts.

Spending on gifts is set to increase by just 4.2 per cent while spending on experiences will leap by almost 30 per cent.

Monitor Deloitte Retail Strategy Partner Harsha Maddipatla 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.”

Key consumer findings
  • 33 per cent of consumers expect to spend more than they did last year (up from 24 per cent in 2024), with Australians aged 18–24 (59 per cent) and blue-collar workers (38 per cent) leading the charge back to the checkout.
  • 43 per cent 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 per cent saying they’ll spend less (compared to 24 per cent overall).
  • More than a third of consumers (34 per cent) say they are likely to switch brands for a better deal, rising to 42 per cent for those under 35.

What will 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.

Deloitte said that while consumer sentiment hasn’t completely shed last year’s pessimism, things are turning around fast: 32 per cent of consumers feel optimistic about their financial outlook over the next 12 months, up from 26 per cent in 2024.

According to the survey, retailers can feel the change, with more than 80 per cent expecting sales growth and around three in four (74 per cent) expect consumer confidence to improve over the next 12 months, up from 41 per cent in 2024 and just 10 per cent in 2023.

In a double dose of good news, cost pressures are also easing, with 24 per cent of retailers citing them as their greatest risk, compared to almost 40 per cent in 2024.