The traditional end-of-year advertising blitz by retailers is in full swing, but there are signs Australian shoppers are becoming more cautious.

While consumers have been resilient in the face of rate hikes and high inflation, bank spending trackers have detected some pre-Christmas restraint.

Spending observed by ANZ in the month to December 18 was just 10 per cent higher than in 2019, even though price inflation has been 10.5 per cent in that period and the national population is nearly 2 per cent larger.

That points to “lacklustre spending” in the pre-Christmas period, says ANZ economist Adelaide Timbrell.

During 2022 households have been grappling with the highest inflation in three decades and interest rate increases in eight consecutive months. The Reserve Bank’s official cash rate is at a 10-year high of 3.1 per cent. Consumers are also bracing for a sharp increase in electricity prices in the months ahead.

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For much of the year spending proved surprisingly robust in the face of these headwinds. But it was only a matter of time before cost of living pressures and higher borrowing costs took a toll. Sluggish credit growth figures released just before Christmas were another sign of caution in the economy.

December may be a turning point for consumers. “The spending slowdown has begun,” warns Timbrell.

The final three months of the calendar year, which includes Christmas and the Boxing Day sales, is crucial for the retail sector, which is one of Australia’s biggest employers. According to peak body The Australia Retailers Association, “most discretionary retailers make up to two-thirds of their profit during this critical trading period”.