Shoppers to splash the cash in $1.3b Boxing Day spree

Australians will splash $1.3 billion on Boxing Day sales after unseasonably early shopping tactics, despite cost-of-living pressures.

The projected figures are a 1.8 per cent increase on last year's spending, according to data from Australian Retailers Association and Roy Morgan.

For the six days following Christmas, shoppers will continue to make the most of the bargains, spending $3.7 billion across that period, up 2.7 per cent on the same timeframe in 2023.

NSW is expected to lead the charge, with shoppers ready to spend $1.1 billion over five days.

Victorians are close behind, with an expected total of $951 million.

Forecasts estimate Queenslanders will spend $746 million, South Australians $234 million, Western Australians $410 million, Tasmanians $74 million, Territorians $33 million and shoppers in the ACT $69 million.

This will include $296 million on food, $378 million on household goods and $197 million on clothing and footwear to make up the bulk of the sales spending.

Australian Retailers Association spokeswoman Alexandra Keefe said the lift in pre-Christmas buys were partially due to shoppers starting their festive planning early.

"We've seen (shoppers) start to plan their Christmas gift lists as early as October and to start shopping in October as well," Ms Keefe said.

"Of course there's going to be that last-minute shopper.

"We know Australians this year are forecast to spend $69.8 billion in the lead up to Christmas and $11.8 billion on gifts alone."

Still, conditions have been generally challenging for retailers.

Headline inflation has outstripped sales growth, rising 2.8 per cent in the year to September.

Buying habits have changed in recent years, with shoppers increasingly shifting their spending earlier in the discount season given the surge in popularity of Black Friday and Cyber Monday sales.

There is optimism the Reserve Bank will lower the cash rate to 4.10 per cent at its next meeting in February, with the money market implying an almost three-quarters chance of a 25 basis point cut.

The minutes from the December meeting, released on Tuesday, could reinforce that view.

A rate cut would be good news for hotel operators, although accommodation providers still experienced strong booking growth this holiday period.

Nationally, bookings are up 4.6 per cent in December and four per cent in January from the same period last year.

While customers were still prioritising a holiday, they were looking for the best value they could find, according to Accommodation Australia chief executive James Goodwin.

"This is a solid result, particularly when we know family budgets are tight and international tourism has still not returned to pre-COVID levels," he said.