Marketers follow the traffic: Despite consumers tightening belts, spend on essentials continues to rise.

Every conversation I'm having with clients and partners at the moment comes back to the same tension: household budgets are stretched, and Australians are getting more deliberate about where every dollar goes. Interest rates, insurance, energy bills and everyday cost-of-living pressures haven't eased, and the flow-on is visible in retail.  

But the story isn't simply "consumers are spending less." They’re still spending but differently, and more dollars are diverting into essentials – think non-discretionary categories like food, chemist and pharmaceutical spending. The discretionary purchases and little luxuries that used to carry retail growth are dropping while everyday goods are spiking.  

The numbers back this up. Deloitte’s Access Economics' Retail Forecasts report from 29 May 2026 shows discretionary retail growth slowing sharply, from 2.5% in the year to December 2025 to just 0.7% forecast for the year to December 2026. Essentials are moving the opposite way, accelerating from 2.5% to 3.0% over the same period.  

What we’re seeing is essentials pulling away as the one category still climbing upwards, while everything else slows down around it. Talk to retailers themselves and you hear the same thing: this feels less like a temporary belt-tightening and more like a reset in how Australians plan to shop from here. 

For brands and advertisers, that shift changes where attention should sit. When budgets tighten, shoppers don't disappear from essential retail - if anything, they show up more often, comparing prices and value across more trips rather than fewer. That's more decisions being made, more often, in the same everyday places.  

Playing it safe right now doesn't mean pulling back. It means showing up where people are actually shopping and making more considered purchase decisions - because that's where a brand gets noticed, week after week. Groceries are just one part but there are everyday essentials that we consistently see people not willing to give up - even in a crunch - like their gym memberships, and driving to see friends and family. Of course, people are still going into the office during the week and spending on public transport too. 

That's exactly where VMO comes in. Our network lives inside the shopping centres, convenience stores, gyms and workplaces that remain part of people's routines no matter what the economy is doing. As discretionary retail cools and essentials carry more of the load, staying visible there isn't a nice-to-have for brands. It's where the growth is.