Amidst rising expenses, Australians are utilising loyalty programs to make ends meet in the face of rising household costs.
Carly Neubauer, director and co-founder of Elevate Loyalty highlights that loyalty programs have become a vital tool in managing household budgets for many families.
With the rising cost of essential items, Australians are finding themselves in a constant battle to make their budgets stretch further.
“Consumers are looking for ways to save money to meet their household needs on a smaller budget. The cost-of-living crisis is hitting hard, and Aussies around the nation are having to budget very carefully and make lifestyle sacrifices to keep their heads above water. This is where loyalty programs are coming to the fore; they can really help you out if you’re smart about using them and work them to your advantage,” Neubauer explains.
Range of benefits
Loyalty programs offer a range of benefits and rewards to consumers who participate in them.
These programs allow shoppers to accumulate points, receive discounts, and access special offers, ultimately helping them save money on their everyday expenses.
With the cost of living on the rise, loyalty programs have become a valuable resource for cost-conscious Australians.
As more Australians sign up for loyalty programs, companies are intensifying their efforts to attract and retain customers.
Loyalty programs are becoming increasingly competitive, with businesses offering deeper discounts and more enticing incentives to stand out in the market.
“Companies are really digging deep with their loyalty program incentives because competition is fierce at the moment. In addition, shoppers are also increasingly turning to research to find better deals,” Neubauer adds.
This competition among retailers has led to consumers benefiting from deep discounts and a wide range of additional perks, including points, gifts, and other discounts. Some companies are even expanding their loyalty programs to allow spending with other brands to generate loyalty benefits for program members, further enhancing the value proposition.
Brad Banducci quits as Woolworths Australia CEO after TV blow-up
Woolworths CEO Brad Banducci has revealed his decision to step down from his position, with Amanda Bardwell, head of loyalty and e-commerce, slated to succeed him as chief executive in September.
Bardwell’s appointment marks a historic moment as she becomes the first woman to lead the company in its nearly 100-year history.
Banducci’s departure comes at a critical juncture for Woolworths and its competitor, Coles, as they brace for an upcoming Senate inquiry led by the Greens.
The inquiry, scheduled for next month, is expected to scrutinise higher grocery costs, which Canberra has blamed for inflating supermarket profit margins at the expense of consumers.
This is what happened when Four Corners asked Woolworths CEO Brad Banducci about the lack of competition in the Australian grocery market.
— ABC News (@abcnews) February 19, 2024
In addition to the Senate inquiry, Labor has urged the competition regulator to investigate the supermarkets, with Prime Minister Anthony Albanese suggesting potential abuse of market power by the retailers.
Woolworths chairman Scott Perkins clarified that Banducci’s succession timeline was not accelerated in response to the scrutiny faced by the supermarket industry.
Perkins stated that interviews with potential candidates for the CEO position had been ongoing since the latter half of the previous year.
“There has been an ongoing dialogue with Brad,” Perkins told media. “There was no change to the timetable, no expedition at all.”
Importance of authenticity
Banducci acknowledged that he had considered delaying his departure but ultimately decided against it, citing the importance of authenticity. Despite the challenges facing the industry, he expressed confidence in Bardwell’s ability to lead Woolworths into the future.
Analysts reacted to the news with a mix of surprise and caution.
In financial terms, Woolworths’ food retail division reported a 5.2 percent increase in sales, or 6.6 percent excluding tobacco.
However, the company noted a moderation in prices, with average increases of 1.3 percent in the last three months of 2023.
Despite this, margins continued to improve, and earnings for the division rose by 8.2 percent.
Walmart reports holiday sales as shoppers seek better value
Walmart disclosed its fourth-quarter earnings showcasing a surge in sales during the holiday season, offering early insights into consumer spending trends amid a crucial period.
Despite a challenging economic climate, Walmart reported a 4 percent increase in comparable store sales for the three months ending in late January compared to the previous year.
The number of transactions also saw a notable uptick, rising by 4.3 percent. However, there was a slight decline of 0.3 percent in the average ticket price, indicating a tendency among shoppers to spend marginally less during their shopping trips.
The retail behemoth witnessed a significant boost in its online sales, with a 17 percent increase in the U.S. market and a remarkable 23 percent surge globally, surpassing the $100 billion mark. Walmart’s Chief Financial Officer, John David Rainey, attributed this growth partly to cost-saving measures in their e-commerce operations and the rising adoption of Walmart’s delivery services.
While the e-commerce sector saw substantial gains, there was a noted decrease in discretionary purchases such as electronics, as consumers prioritized essential items amidst economic uncertainties.
Walmart’s emphasis on value and affordability played a pivotal role in driving sales, particularly in its grocery segment.
The company’s CEO, Doug McMillon, highlighted Walmart’s commitment to offering competitive prices, leveraging its substantial grocery business.
In a strategic move to enhance its offerings, Walmart announced the acquisition of television manufacturer Vizio in a deal worth $2.3 billion, further expanding its Walmart Connect advertising and media business.
Millions of Australians are struggling with credit card repayments
Recent research has revealed a concerning trend: a significant number of Australians are falling behind on their credit card repayments, highlighting the financial strain faced by many households.
According to Finder’s Credit Card Report 2024, approximately 13% of Australian credit card holders, equivalent to nearly 1.8 million individuals, have missed at least one repayment in the past three months.
Of this group, 8% have fallen behind by 30 days, while 4% have missed payments by 60 days.
Alarmingly, 2% of cardholders have delayed repayments by more than 60 days.
Amy Bradney-George, a credit card expert at Finder, expressed concern over the prevalent misuse of credit cards, attributing it partly to the escalating cost of living.
Bradney-George warned that missing a credit card payment often incurs late fees and interest charges, exacerbating financial burdens for individuals.
Bradney-George emphasised the detrimental impact of late payments on credit scores.
She highlighted that a missed payment can be recorded on a credit file within just 14 days, potentially affecting an individual’s ability to secure loans or new credit cards in the future.
With details of late payments lingering on credit reports for up to two years, the consequences could be long-lasting.
Currently, there are over 13 million credit cards in circulation across Australia, accumulating a national debt of $18.1 billion subject to interest charges.
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