After a long and cold winter, shoppers are ready to open their wallets again as they are set to spend 14 per cent more this holiday season.
According to the 14th edition of Deloitte’s annual Retail Holiday Report, 84 per cent of retailers expect stronger sales this year, up from 51 per cent in 2024.
However, while one in three shoppers plan to spend more, many will look to stretch their dollars further by bargain hunting during November sales events or turning to Chinese online marketplaces—a growing competitive threat for Australian retailers.
“Retailers have had more than a few blue Christmases, with the sector battling recession-like conditions for years,” Deloitte consumer products and retail partner Damien Cork says.
“Now, with consumer optimism rebounding amid more favourable economic conditions, retailers can look forward to some Christmas cheer.”
They expect to generate half of their holiday revenue through Click Frenzy, Black Friday and Cyber Monday combined, but Christmas and Boxing Day are still expected to deliver the most sales on their own.
“Retailers hoping to make the most of the all-important holiday trading period will be leaning into the marquee November sales events of Click Frenzy, Black Friday and Cyber Monday, when value-conscious consumers are increasingly getting their shopping done.
“For the first time since this survey began, retailers expect to generate 50 per cent of their holiday revenue through this period,” Cork notes.
Around two in five Gen Zs (44 per cent) and 25–34-year-olds (41 per cent) say they are more likely to shop with Chinese online marketplaces this year, drawn by low prices, vast selection and fast delivery.
“Online shopping is here to stay, but it is not all the consumer wants,” says Harsha Maddipatla, retail strategy partner at Monitor Deloitte.
“Physical stores continue to play a vital role in retail, serving as hubs for service, discovery and fulfilment. Shoppers now move fluidly between channels, browsing online, testing or collecting in-store and finalising purchases on their phones.
“Expectations have shifted. Consumers are no longer shopping by channel; they are shopping by experience. They are also willing to spend for the right reason, with 68 per cent of consumers saying obtaining the exact product they want is important, even if it means paying full price.”
What can retailers expect in 2026?
The retail sector is set to return to growth in 2026 with more than 80 per cent of retailers expecting sales growth while 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.
However, competition is intensifying: 35 per cent of retailers now cite existing competitors as their top risk, slightly up from last year (34 per cent) and significantly higher than in 2023 (five per cent). Artificial Intelligence (AI) is emerging as a key tool enabling efficiency, with 41 per cent of retailers mainstreaming it across their business. Elsewhere, crime is a mounting concern, with nearly half of all retailers reporting a rise in shrinkage due to theft, fraud and error.
“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,” says Cork.
