Spending is down for some Australians, but one group continues to thrive

Spending continues to trail inflation as Australians head into the final quarter of the year, new data from the Commonwealth Bank has revealed.

The CommBank iQ Cost of Living Insights report showed the amount of money being spent on essentials halved in the past year, down to 1.7 percent, driven by a fall in petrol prices, down 6 percent, and lower spending on utilities, down 3 percent.

However, there is a marked difference across age groups, with Australians between 18 and 29 years cutting back on spending more than any other age group, down 2 percent over the past year. At the other end of the scale, Australians aged between 60 and 69 years increased spending over the same period, up 3.9 percent, while spending among those over 70 rose 7.7 percent.

Wade Tubman, CommBank iQ Head of Innovation and Analytics said it was further evidence of the widening generational gap when it comes to cost of living pressures.

“Lower petrol prices and government energy relief programs have eased the pressure on essential spending and July’s income tax cuts have increased take home pay for many Australians, however there continues to be a discrepancy between the spending power of older and younger Australians,” he said. “In fact, we’ve seen those all the way up to 40 years-old cut back on spending, highlighting the large swathe of the population feeling cost of living pressure.”

The report also showed that spending had risen in some areas, with value and convenience identified as key drivers. The ‘General Retail’ category saw a 5 percent increase in spending, with online marketplace sale increasing by 20 percent, food delivery up by 6 percent and streaming services experiencing a 13 percent rise.

The news comes as Australian retailers embrace the US-style Black Friday sales. Traditionally held the day after US Thanksgiving — November 29 this year — a number of leading retailers offering ‘early’ sales deals to draw in budget conscious shoppers ahead of the Christmas season. Amazon is among those who officially kicked off their sales period today.

Choice reported the Black Friday four-day period accounted for $8.7 billion in spending last year, based on NAB data, up from $7.1 billion in 2022. Data from the Australian Bureau of Statistics showed last year’s spend in that period overtook the December period, indicating Australians are bringing their Christmas spending forward.

The boom in casual footware ushered in by the pandemic has ended, a potential problem for companies such as Adidas that benefited from the shift to less formal clothing, Bank of America says.

The casual footwear business has been on the ropes since mid-2023 as people began returning to office.

Analyst Thierry Cota wrote that while most downcycles have lasted one to two years over the past two decades or so, the current one is different.

It “shows no sign of abating” and there is “no turning point in sight,” he said.

Adidas and Nike alone account for almost 60% of revenue in the casual footwear industry, Cota estimated, so the sector’s slower growth could be especially painful for them as opposed to brands that have a stronger performance-shoe segment. Adidas may just have it worse than Nike.

Cota downgraded Adidas stock to Underperform from Buy on Tuesday and slashed his target for the stock price to €160 (about $187) from €213. He doesn’t have a rating for Nike stock.

Shares of Adidas listed on the German stock exchange fell 4.5% Tuesday to €162.25. Nike stock was down 1.2%.

Adidas didn’t immediately respond to a request for comment.

Cota sees trouble for Adidas both in the short and long term.

Adidas’ lifestyle segment, which includes the Gazelles and Sambas brands, has been one of the company’s fastest-growing business, but there are signs growth is waning.

Lifestyle sales increased at a 10% annual pace in Adidas’ third quarter, down from 13% in the second quarter.

The analyst now predicts Adidas’ organic sales will grow by a 5% annual rate starting in 2027, down from his prior forecast of 7.5%.

The slower revenue growth will likewise weigh on profitability, Cota said, predicting that margins on earnings before interest and taxes will decline back toward the company’s long-term average after several quarters of outperforming. That could result in a cut to earnings per share.

Adidas stock had a rough 2025. Shares shed 33% in the past 12 months, weighed down by investor concerns over how tariffs, slowing demand, and increased competition would affect revenue growth.

Nike stock fell 9% throughout the period, reflecting both the company’s struggles with demand and optimism over a turnaround plan CEO Elliott Hill rolled out in late 2024.

Investors’ confidence has faded following Nike’s December earnings report, which suggested that a sustained recovery is still several quarters away. Just how many remains anyone’s guess.

But if Adidas’ challenges continue, as Cota believes they will, it could open up some space for Nike to claw back any market share it lost to its rival.

Investors should keep in mind, however, that the field has grown increasingly crowded in the past five years. Upstarts such as On Holding and Hoka also present a formidable challenge to the sector’s legacy brands.

Shares of On and Deckers Outdoor , Hoka’s parent company, fell 11% and 48%, respectively, in 2025, but analysts are upbeat about both companies’ fundamentals as the new year begins.

The battle of the sneakers is just getting started.

Spending is down for some Australians, but one group continues to thrive

As cost of living pressures bite, retailers are taking bold steps to draw out cautious buyers

The pandemic-fuelled love affair with casual footwear is fading, with Bank of America warning the downturn shows no sign of easing.