Cautious consumers will be like Scrooge this Christmas
(BusinessDesk) Kiwis look set to tighten their purse strings this Christmas with more than two-thirds of people surveyed less likely to spend on non-essentials compared to the same time last year.
Some 63% of New Zealanders intend to avoid making major purchases such as a car, television, home improvement project or a holiday in the December quarter, according to credit checking agency Dun & Bradstreet consumer credit expectations survey.
The survey found 54% of Kiwis polled are worried about their current financial situation, up 5% on the same period a year earlier, while 62% are less likely to use a credit card or a loan to buy the things they want compared to the same time last year.
"We are seeing increased concern about consumer finances flowing through to expectations for spending and credit usage," Dun & Bradstreet's New Zealand general manager John Scott says.
"At the same time, the cost of living is rising and heightened caution since the global financial crisis has encouraged many New Zealanders to save, or pay down their debt, rather than spend. As a result, most consumers are adopting a prudent approach this Christmas."
Concern over finances was evident, with 27% of local consumers surveyed anticipating difficulties paying off their credit card bills in the December quarter. Expectations for card usage were also down quarter-on-quarter, with 4% intending to apply for a new credit card, down from 6% in the September quarter.
"Despite more conservative consumer expectations and an improvement in household saving rates, a portion of people still experience difficulties meeting their credit obligations," Mr Scott says.
"Many New Zealanders struggle with elevated levels of debt and are dependent on each pay cheque to fund day-to-day expenses."