- Almost 2 in 3 Aussies are experiencing moderate to high cost of living impact
- Amid ongoing food inflation, Aussies are having to allocate more of their Christmas budgets to festive food and drinks ($518) than gifts ($487), with planned gift spending declining for the first time since 2023
- Aussies will focus firmly on family, health and saving in 2027, shifting away from aspirational areas like travel and career advancement due to economic instability
SYDNEY, 20 October 2026: New research conducted by global data and insights company, Pureprofile Limited (ASX: PPL), reveals that the cost-of-living crisis is dampening the Christmas cheer, as Australians head into the festive season more cautious and stressed than previous years.
Now in its eighth year, Pureprofile’s 2026 Christmas Report is based on insights from 1,015 Australian residents aged 18-64 who participated in the research through Pureprofile’s online research panel.
Almost two in three (62%) Australians say they are experiencing moderate to high cost-of-living impact, cutting back on both essential and non-essential purchases. Less than a quarter (24%) think the economy is strong (down from 29% in 2025), and only a third (33%) report having had a “good” or “fantastic” year (down from 36% last year).
The report reveals cost-of-living pressures are directly affecting festive season sentiment, with 79% of Aussies adjusting their spending accordingly. 35% plan to spend less on gifts, and 30% are choosing more budget-friendly food and drink options (up from 21% in 2025).
For the 62% of Australians experiencing moderate to high cost-of-living pressures, these figures are far higher: 90% expect to adjust their expenses, 44% plan to spend less on gifts, and 34% will look for cheaper food and drink options.
Despite seeking bargains, Australians still expect to spend more on food & drink, at $518 on average (up $12 from 2025), than gifts, at $487 on average (down from $491 in 2025). To meet this non-negotiable spending, Australians’ top categories to cut this Christmas are decorations (70%), eating out (65%) and experiences (58%).
Martin Filz, CEO, Pureprofile, says consumers are increasingly focused on genuine value for money and budget-friendly options as they navigate the festive season and look ahead to 2027.
“Brands and retailers that enter 2027 seeking to meet people where they are will be tapping into the dominant mood over the vital Christmas retail period. Given the ongoing cost-of-living crisis facing many Australians, this means offering comfort, reassurance and affordable options,” Filz says.
Black Friday: a budget lifeline but a double-edged sword
Black Friday is becoming an essential part of helping Australian consumers manage the festive budget. 58% of Australians plan to leverage sales to bridge the Christmas budget gap. This increases to 76% for families with children aged 0-12, a key Black Friday audience.
However, the shopping festival is a double-edged sword and can encourage overspending. Nearly half (47%) of Black Friday shoppers admit they often spend more than planned, increasing to 58% for young families and 51% for both Gen Z and Millennial shoppers. And while Black Friday sales are becoming increasingly appealing to Australians feeling the cost-of-living crunch (61%, up from 48% in 2025), 44% say the sales create pressure to spend money they didn’t plan to (up from 34% in 2025), and 37% find the sales period “too overwhelming” (up from 29% in 2025).
“As Black Friday becomes the major sales event of the year, Australians are increasingly experiencing both choice fatigue and the fear of missing out. Retailers can win trust by showing they understand the pressure shoppers are under and helping them stay in control. Clear and honest discounts, easy comparisons, price-match promises and flexible returns are keys to seeing carts fulfilled,” Filz says.
Diverse discovery driving deals
Retailers should also be aware of the increasing importance of social shopping. One in five (21%) Gen Z are buying more products directly from social media platforms such as TikTok, Instagram and Facebook than a year ago.
Targeting shoppers with Black Friday deals requires a multichannel approach. Gen Z should be targeted via social media or in-store, while Google search and retailer emails will have more impact with older generations.
Interestingly, this shift is happening concurrently with a renaissance of in-store commerce for younger shoppers. Despite being raised with online shopping at their fingertips, Gen Z (65%) are even more likely than Millennials (50%) to prefer shopping for gifts in-store rather than online.
“With a desire for experiential environments, ‘third spaces’ to hang with friends, and tactile product evaluation, Gen Z are redefining what in-store shopping means and turning it into a cultural moment. Mecca, Kmart and Glassons are key examples of retailers catering to Gen Z, and retailers should take note of these elements to streamline and entice in-store visits, as it no longer suffices to merely have products on display,” Filz said.
Twice as many Gen X (37%) and Boomers (35%) respond to retailer emails and newsletters as Gen Z (18%). While only half as many Gen X (29%) and Boomers (24%) use social media to discover deals as Gen Z (57%).
Boomers (33%) are the main demographic discovering deals through TV, radio and print advertising, which plummets to just 11% for Gen Z.
Smart shoppers seeking AI assistance
AI assistants may also be an important deal-finding channel for 1 in 5 Australians, particularly younger generations. More than one in four Millennials (26%) as well as Gen Z (26%) plan to use AI this year specifically to help with Christmas plans and gifts.
Among those likely to use AI, the top uses include comparing prices or finding deals (41%), getting gift ideas for specific people (31%) and seeking product recommendations while shopping online (28%).
Practical, personal and perhaps homemade
The most popular gifts Australians are hoping to receive in 2026 are oriented around necessities and/or the freedom to choose, such as gift cards (45%), clothes or shoes (44%), money (37%) and food & drinks (33%). What people plan to give largely mirrors what they would like to receive, though strained gift budgets are leading to some behaviour shifts.
Significantly more people in Australia (15%, up from 11% in 2025), particularly Gen Z (20%), are planning to give homemade gifts. Unfortunately for those planning handmade presents, these are among the least desired gifts, with just 17% hoping to receive one.
Staying close to what matters most
With economic instability forecast to continue into 2027, Australians’ priorities for 2027 reflect a shift to focus more on the things people feel they have immediate control over.
Top personal priorities for the New Year are led by saving more money (53%), followed by improving health and fitness (39%), and spending time with family (37%). The shift away from aspirational areas like travel (25%) and career advancement (14%) reveals a desire to prioritise emotional and financial safety.
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About Pureprofile
Pureprofile’s vision is to deliver more value from the world’s information.
We are a global data and insights organisation providing industry-leading online research solutions to agencies, marketers, researchers and brands & businesses.
Our research delivers rich insights into real human behaviour and provides the “Why” behind the “What” through our unique ResTech and SaaS solutions. We build in-depth profiles of consumers via our proprietary and partner panels and give businesses the ability to understand, target, and ultimately engage with their audiences.
The Company, founded in 2000 and based in Surry Hills, Australia, now operates in North America, Europe and APAC and has delivered solutions for over 850 clients.
Media contact:
Agnes Wan for Pureprofile
T: +61 432 620 256
E: [email protected]
