n the meantime, there are several trends that brands can lean into to successfully capitalise on Christmas spending, including building trust, leveraging discounts and highlighting sustainability. Inside Retail spoke to Elise Sharpley, Deloitte consumer products and retail sector leader, to unpack the report’s key findings. Inside Retail: What was the most surprising finding in this year’s Retail Holiday Report? Elise Sharpley: This year’s survey really highlights the impact of ongoing inflation and cost-of-living pressures on Australian households, with consumers telling us they are looking to cut holiday spending by almost 20 per cent on average. Diving deeper, it’s clear that consumers are looking to save money wherever they can this holiday season, whether it’s through purchasing lower-cost food products or by placing a larger emphasis on discounts on deals when gift buying. People also plan to travel less – 90 per cent of those surveyed are looking to save money by staying home over the holidays. Retailers that capitalise on these trends should take a greater share of wallet this silly season. IR: How do the findings for the 13th edition stack up against past years?  ES: The post-Covid era has been a rollercoaster and retailers have swung from the worst to the best trading conditions in many years and back again. Retailers are noticeably less optimistic about the odds of increasing sales this year, with only half of retailers expecting sales growth – down from 57 per cent in 2024 and 67 per cent in 2022. This is one of the most pessimistic outlooks in the history of the survey. Despite the immediate holiday outlook, retailers are hoping we are at the bottom of the cycle and will see an improvement in conditions for the year ahead, perhaps on the basis that the possibility of a rate cut within the next year combined with the effect of income tax cuts will boost consumer confidence. As we move further away from the pandemic era, we’re also seeing a return of the importance of the bricks-and-mortar storefront. While social and search are important and constitute the first step of 58 per cent of customer journeys, online sales transactions are expected to decline as a total share of spend these holidays, with more consumers looking to research online and then complete purchases in-store. IR: Is the outlook for retail earnings this holiday season optimistic? ES: Our reporting indicates retail margins will continue to come under pressure this year with only 40 per cent expecting growth in margins. With less than a quarter of consumers expecting to spend more these holidays and 55 per cent cutting back on volumes, the outlook for retail earnings remains subdued. However, a strong majority of retailers are expecting consumer confidence to improve over the next year, meaning we could be at the bottom of the cycle right now. IR: Based on the report’s findings, how would you advise retailers to navigate this upcoming holiday season? ES: Retailers should focus on what they do best: Providing great value with products at a fair price and by providing exceptional customer experiences both in-store and online. Our report indicates that value is the name of the game this year. Just under a third of consumers are prepared to walk away from a purchase if they can’t secure a good deal or discount while 95 per cent of consumers rate getting the best deal as their highest priority. The main way consumers look for deals is online, but a majority of them are then looking to purchase in-store – wanting to see, touch and experience the product before buying. That means an exceptional in-store experience will be important, along with an integrated online experience to help entice customers. IR: Are the current cost-of-living pressures the only factor that will negatively impact consumer spending? Trust is more important than ever before, with 84 per cent of consumers telling us trust is critical or important to their purchasing decisions. Product quality is the most important factor for building trust according to 52 per cent of respondents, while 19 per cent say fair pricing is most important. This emphasis on trust has flown through to retailers being more concerned about competition from domestic online rivals this year as local players are often better trusted by consumers than overseas rivals. That being said, just over a third of consumers are considering purchasing from overseas sellers due to cost-of-living concerns. IR: Do you see any common denominators amongst retailers who are expecting to have a period of growth despite declining consumer confidence? ES: Trust is the number one common denominator amongst retailers this holiday season. Both retailers and consumers agree that offering quality products at a good price is most likely to earn the trust of consumers and win their business, and those retailers that execute this along with an integrated digital, social and physical retail offer will benefit the most. Sustainability is increasingly becoming a dominant theme: 44 per cent of consumers say environmental, social and governance (ESG) factors are important or critical to their purchasing decisions – however, given cost-of-living pressures, most consumers are not currently willing to pay more for sustainable products or services. Retailers that deliver sustainable products at competitive prices will win a higher share of the consumer dollar, particularly in the Gen Z and Millennial cohorts, who place a proportionally higher emphasis on sustainability.