Christmas shoppers are prioritising food over clothing and goods this year as the cost of living means tight budgets. Photo: 123rf.com
Some stores are starting their Boxing Day sales early as they try to make up for a slow Christmas shopping season.
Tighter budgets mean lighter stockings this Christmas as consumers get more selective with their holiday shopping.
Shoppers are buying fewer presents and saving their cash for food and other daily essentials.
Retail NZ chief executive Carolyn Young said some stores were already getting desperate.
"There are definitely a number of stores that have got their Boxing Day sales up already, you'll see big signs with 40 percent or 50 percent off," she said.
"They're trying to entice people into the stores with big sale figures out now."
Young said business owners who relied on the Christmas rush to stay afloat are worried.
"It's going to mean that more and more pressure comes on businesses around how they survive through next year," she said.
"A number of small businesses have spoken to us about [how] their ability to trade next year will be dependent on how good their sales are in the Christmas period and Boxing Day."
She said retailers hoped the cost of living crisis could be brought under control next year.
Young said it had been a slow summer for stores around the country.
"Normally you see a build day on day, week on week ... we're not seeing that build that we've seen in the past," she said.
"There's still some quiet days, you might have one or two quiet days and then it'll be really busy, and then it'll be quiet again."
Shoppers explained why.
"People are watching their dollars," one shopper in central Christchurch said.
"We cut it back to only doing Secret Santa, it gets a bit silly buying for everybody," said a second.
Others said they were spending less time in stores and more time online.
"I did most of my Christmas shopping online because it was easier to find things cheaper," a Wellington shopper said.
"There's been some pretty good deals online, in store not so much," said another.
Online retailer Mighty Ape said it had more customers this year than ever before.
"There's more uptake, last week [we had] a 20 percent increase compared to 2022," chief executive Gracie Mackinlay said.
But they were spending less.
"The average order value decreased slightly, the average basket size has decreased," she said.
Some sectors were hurting more than others. EFTPOS network operator Worldline said consumers were favouring daily needs and recreation over Christmas gifts and other luxuries.
"We've seen food and liquor be significantly higher, about 7 percent up ... and recreational goods are up which is positive given they've been down for the past quarter or so," said chief sales officer Bruce Proffit.
"But surprisingly clothing and footwear, where there's a lot of gifts going into Christmas, is down almost 9 percent so that was a bit of a shock."
He said the allure of Christmas shopping wasn't quite as strong as it used to be.
"It's still the most important time of year for retailers in terms of spend, but we are seeing things like Black Friday in November start to impact the amount of spend in December," he said.
Massey University Professor of Marketing Bodo Lang said shoppers would see bigger discounts as retailers worked to attract customers.
"When cost of living is high and retail sales are down, what retailers typically do is they respond by using sales promotion tactics," he said.
"Just to get more people into the shop in the first place."