COST OF LIVING.

INFLATION.
INTEREST RATES.

It’s dominating the news headlines, but how are Australians

really thinking, feeling, and spending?

To cut through the noise, download dentsu’s Read the Room, a

survey of over 4,000 Australians which reveals their changing
spending behaviours and the motivations and needs that are
shaping their household finances in today’s uncertain economy.

These shifts are directly affecting the way Australians think,

feel, and act.

Some are changing their ways, some are staying the course,
and some are living it up.

When wallets are squeezed, which brands will win? The ones
who can read the room.
 WELCOME TO

INTRODUCTION

In May 2023, we returned to the conversation with our five audience

segments that first began back in July of 2022.
While Australia is unlikely to slip into a technical recession, we are
• The Rich & Ready most definitely in the midst of a consumer recession. The proportion
of people who feel that they have money left over after bills and
• The Wealthy &Unwise
necessities is at its lowest point since 2005. This is lower than
• The Living for Today both the 2009 Financial Crisis and the bleakest times of the
COVID pandemic. 1
• The Bet Hedgers
For many people in Australia, electricity prices are up 16% compared
• The Suffering & Scared to a year ago, and their combined mortgage repayments have more
than doubled, rising from $11 billion to over $22 billion in the last
These segments were designed to represent the varying financial
12 months. 2
realities and mindsets of Australians in the face of increasingly
challenging economic times. This dramatic change in circumstance is already having an impact
on brands and marketers, and there is more disruption around the
We first spoke with these audiences in July 2022, when the official
corner. In Read the Room, we help marketers understand the current
cash rate was 1.35%, inflation was 6.1% and the national average
state of play as well as the impending events and their implications.
weekly rental price for a unit was $460. Nearly 12 months on,
Australians are now at the mercy of an economic reality shaped This is not your traditional “How to react in a recession” agency
by an official cash rate of 4.10%, 6.8% inflation and a national report. Through Read the Room, we’ve gained a deep understanding
average weekly unit rental of $580 – a whopping 26% increase. of the different responses of Australians to the current financial
crisis, and the resulting impact on categories and brands. This means
The impact of the last 12 months is clearly evident amongst
we can advise on a combination of marketing, targeting and product
our audiences.
strategies to help your brand weather the storm ahead.
We saw a mass exodus from the more financially secure segments,
with 1.3 million Australians leaving both the Rich & Ready and Bet
CHRISTINE MCKINNON
Hedgers, and moving into the two most financially concerned HEAD OF INTELLIGENCE
segments: The Suffering & Scared, and the Wealthy & Unwise.

1. Foreseechange
2. The Australian 12 July 2023
 AUSTRALIANS
OF

LIVING WITH KIDS

claim that their ability to purchase and eat healthy food on a regular basis
has been negatively impacted by rising food costs

Based on a population of 15-74

OUR READ THE ROOM

THE RICH & RE AD Y THE LIV IN G FO R TO D AY

“
I have had a personal budget for many years spanning different
financial situations so I feel with the increased cost of
living I have things under control.
“
I've been trying to cut back on a lot of stuff but at the same time
I try to provide my kids with things they like which can be hard
because it may set you back but you don't need your

13% children to see that your struggling child.

The most financially secure segment, these people 36%

tend to be midlife and older. Over the last 12 months, this Our largest segment, The Living for Today is nationally
segment has shrunk by 3%, mainly across metro areas, while their representative across age and gender, with slightly lower
regional presence has remained stable. They feel safe and household income than average and an above average rate of
comfortable, but at the same time are becoming more concerned mortgaged living. They are facing increasing financial stress, but
as inflation continues. Their behavioural response to this factor their lack of financial foresight means they’re a little oblivious to the
will be to focus on maintaining or increasing savings, prioritizing impact it could have on their lives. There is however a clear desire
essential purchases and exercising frugality. amongst this segment to improve their circumstances, either
through increased income, or education on finance and budgeting.

THE BE T HE D GE RS
THE SUFFE RIN G & SCARE D

“
Groceries are so expensive, I’ve definitely cut back.
It's difficult to buy luxury items when the bills all come.
“
I seriously cannot understand how the government has justified

10% paying billions of dollars from the budget towards lowering the
taxes paid by those receiving the highest incomes, whilst barely
The Bet Hedgers are moderately comfortable with considering raising the welfare payments of those just struggling
their financial position and are more likely to be in a stable housing to meet the bare minimum, ie pay our rent, feed
situation. In a telling statistic, this segment has shrunk by nearly our children.

23%
6% in the last 12 months. The Bet Hedgers take charge of their
financial fate and currently have very low levels of confidence in
the economy. Consequently, their behavioural response sees The Suffering & Scared is the segment who need the
them substituting purchases, looking for cheaper alternatives, or most help. More likely to be females, unmarried, and divorced or
downsizing property where necessary. separated – they represent the Aussies in the most dire of
financial positions. They are being forced to budget, with
groceries and essentials all purchased for the lowest price
THE WE ALTHY & UN WISE possible. Many in this segment are in debt and struggling to cope

“
financially, as even the most basic necessities become
unaffordable. Their dependence on others has increased, as they
Now the economic environment is not optimistic, to hedge are unable to cover their expenses independently. As a result,
against risk, I will be cutting spending for a long time. we’ve seen this segment become significantly less likely to live

One of the least prepared groups for the tough times

17% alone since last year.

ahead, The Wealthy & Unwise segment has increased by

3% since July 2022. As prices rise, they seem to have very little
clue on how to plan their finances in response. Over the past 12
months, there has been a substantial increase in them living with
extended family. And while home ownership has also increased,
those homes are more likely to be a townhouse rather than a
standalone property – a big change from July 2022. The Wealthy
& Unwise have also seen the biggest drop in retail purchases, as
well as a sizable drop in insurance policy holdings.
 AUSTRALIANS

OF
Are buying less alcohol
AUSTRALIANS as they previously did due to its
Are reluctant to travel internationally increased cost
for a holiday because of increased
The impact of this financial travel cost This reduction in spending is predicted to
turmoil will be significant impact many historically resilient
for a broad range of As a result, we see that Suffering and categories, such as:
Scared, Living for Today and Bet Hedgers
marketers, brands, and • Private Health
are all significantly reducing their spend on
categories. • General Insurance
non-essential items, whether they are
• Gifting
indulgences and treats, necessities that
We are in a market where • Technology
can be delayed or things they consider as
• Restaurants and bars
the average weekly luxuries. Even The Rich & Ready are taking
• Streaming Subscriptions
a more conservative approach to these
grocery shop cost has • Travel
same types of purchases.
risen drastically according • Café Beverages
• Branded Groceries
to our study, with a 23%
• Alcohol
increase compared to July
Read the Room reveals that the
2022. From all our
consumer reaction to these categories is
audience segments, the not a blanket response. This study offers
Wealthy & Unwise businesses the opportunity to learn how
to engage their customers according to
reported spending over
their economic context and customise
51% more on their weekly
AUSTRALIANS their marketing and messaging strategies
OF

grocery bill. for the different segments that clearly

have recently cancelled a health, exist in the market.
We’ve witnessed the home or car insurance policy
impact of rising prices,
with four out of five
segments increasing the
amount they spend on
essentials such as housing
THESE PEOPLE
OF

costs, utilities, groceries COMPLETELY EXITED THE MARKET

and education.
THE
OPPORTUNITY
Read the Room reveals the big ABOUT THE RESEARCH
shifts in consumer sentiment as the
cost-of-living rises. These shifts are Read the Room is a study aimed at

directly affecting the way understanding the shifting financial

Australians think, feel, and act. reality of Australians and the
Some are changing their ways, measures they are taking as a
some are staying the course, and result, mapped across a number of
some are living it up. market sectors. We surveyed over
4,000 Australians aged 18-74 in
When wallets are squeezed, which May 2023, and developed our
brands will win? The ones who can bespoke audience segments based
read the room. on this, designed to demonstrate
Now is the time to gain the insights the differing financial experiences
you need to help your brands in play across our nation.
respond and adapt to consumers’ This is the second wave of our
needs. What can Read the Room research following
you reframe? Reposition? on from our initial survey of 2,052
Re-promote? Australians in July 2022.
To understand more about this
study and segmentation, and to
take advantage of the insights and
opportunities that this study can
offer your brand, please contact
David Halter, Chief Strategy Officer
ANZ at [email protected]
 VISIT
www.dentsu.com/au/en/read-the-room
TO LEARN MORE