Where is all our money going?
It seems that 'want' spending is far exceeding our 'need' spending according to Roy Morgan Research results.
Spending on experiences is outpacing spending on either discretionary or basic needs consumption.
Over $132 billion was spent on leisure and entertainment in the year to March 2017 – an increase of $16 billion pa over the five years since March 2012, and far more than was spent on either discretionary commodities ($107b) or groceries ($103b) according to the latest figures from Roy Morgan Research.
Spending on leisure and entertainment exceeds spending on discretionary commodities
Source: Roy Morgan Single Source (Australia), April 2010 – March 2017. Average annual interviewing n=50,000.
Desire Economy leads the way on leisure and experience spending
These trends are even more evident when analysing the different types of consumers in an Australian market with expenditure of over $342b in the past year on leisure & entertainment, discretionary commodities or groceries.
Australia’s 4.5 million NEOs (New Economic Order), who fuel the $600b Desire Economy, spent $119b on these three categories and their spending skewed heavily towards leisure and entertainment - $48b (40.2%) - than either discretionary commodities ($45b) or groceries ($25b).
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In stark contrast the spending patterns of Traditional consumers skew heavily towards grocery spending - $50b (39.0%) - although once again spending on leisure & entertainment ($46b) far exceeds spending on discretionary commodities ($32b).
The Desire Economy: Spending on Grocery, Discretionary Commodities and Leisure & Entertainment
Source: Roy Morgan Single Source (Australia), April 2016 – March 2017 (n=50,002).
Michele Levine, CEO, Roy Morgan Research, says the spending on ‘experiences’ is led by NEOs who are at the cutting edge of changing consumer habits:
“Over the past year Australians spent over $132b on experiences – dining out, going to sporting events, concerts, exhibitions, the cinema, entertaining at home and the like representing an increasingly important part of Australian spending patterns.
“Spending on leisure and entertainment clearly exceeded spending on either discretionary commodities of $107b or groceries of $103b and these spending patterns are seen most prominently in Desire economy consumers who spent nearly twice as much on leisure and entertainment ($48b) than on groceries ($25b).
“Even though the ‘frictionless’ world we are moving into will see spending on experiences becoming an increasingly important part of the every individuals spending patterns it is worth keeping in mind that Traditional consumers still comprise a significant part of the overall market – spending almost as much on groceries ($52b) as both NEO consumers ($25b) and Aspire consumers ($27b) combined.”