‘Only buy stuff for our kids’: Families pull back on spending

About one in two consumers are cutting back on eating out, entertainment and car travel, according to NAB’s most recent consumer sentiment survey.

The research found that stress associated with the cost of living remained by far the biggest concern for consumers.

But it also found that consumers had become accustomed to these pressures and had broadly managed to adapt due to “the availability of jobs”.

Cutting back on eating out was the most popular money-saving tactic this quarter, followed by limiting coffees and snacks and spending less on entertainment such as the cinema.

Almost six out of 10 customers (55 per cent) cancelled or reduced their restaurant visits during the survey period – the same number as last quarter – while an unchanged 50 per cent of consumers cut back on snacks and 47 per cent reduced their entertainment spending, down from 49 per cent in the previous quarter.

“Not surprisingly, the biggest savings came from big-ticket items – holidays (on average saving $549, up from $392 in Q2) and major household purchases ($545, up from $461),” NAB’s researchers said.

Four in 10 cancelled or delayed holidays or made more modest travelling plans – down from 42 per cent last quarter – and an unchanged 45 per cent of consumers reduced their car usage in response to high petrol prices.

NRMA spokesman Peter Khoury said that wholesale petrol prices rose to the highest on record in September, after Russia, Saudi Arabia and the Organisation of the Petroleum Exporting Countries announced they would all significantly cut oil production for the rest of the year.

But he said prices had fallen since then and had risen only slightly in response to the Israel-Hamas conflict.

“We’ve seen a lot of speculation over what could happen [to petrol prices] as a result of the [conflict in] the Middle East,” Mr Khoury said. “But it hasn’t happened yet.”

On Friday, the average price for a litre of unleaded petrol at the bowser was $1.87 in Sydney, $1.95 in Perth and Melbourne, $2.06 in Brisbane, $2.02 in Hobart and $2.11 in Canberra. In Darwin it was $2.05 and in Adelaide, $1.96.

Mr Khoury said reduced supply from most oil-producing countries and the ongoing Russia-Ukraine conflict was applying upward pressure on prices, but record-high oil production in the US and weaker demand from the Chinese economy was helping to offset these pressures.

Commonwealth Bank on Friday predicted Brent crude could exceed $US100 a barrel if Iran was drawn into the conflict “more directly”. Qantas said it would raise airfares to mitigate the pressure on margins from higher jet fuel.

Brent crude traded at $US93.33 a barrel and West Texas Intermediate $US90.78 on Friday, rising about 1 per cent.