Coles chief executive Leah Weckert has highlighted a shift toward more cautious consumer behavior ahead of the Christmas season amid ongoing interest rate hikes in Australia. With the Reserve Bank having raised rates four times this year—in February, March, May, and September—and a likely fifth increase expected in November, shoppers are increasingly focused on value, Weckert said.

Consumer sentiment has notably weakened since mid-2026, reflecting tighter monetary conditions and heightened cost-of-living pressures. Weckert noted that customers are demonstrating more price-conscious behaviors such as comparing prices, choosing affordable alternatives, and maximizing loyalty programs like FlyBuys. “Every dollar matters more for the consumer,” she stated, emphasizing how this trend is shaping purchasing decisions as the holiday season approaches.

In response, Coles has tailored its Christmas grocery and liquor offerings to support budget-conscious households. Approximately 200 items in the festive range are priced at $10 or less, underscoring the chain’s commitment to value. The retailer also plans to run extensive promotions and enable customers to “bank” FlyBuys points for discounts of up to $400 during holiday shopping.

Despite a broader downturn affecting discretionary spending categories like fashion and apparel, Weckert expressed optimism for the $145 billion supermarket sector. She suggested that expenditure curtailed in non-essential retail might be redirected toward food and beverages, which customers still regard as central to celebrating Christmas.

Convenience is another key factor influencing consumer preferences this year. Weckert said shoppers reported being busier, increasing demand for time-saving solutions such as pre-prepared meals. In line with this, Coles is offering products like slow-cooked turkey that requires minimal preparation, catering to those looking to reduce their holiday meal workload.

Consumer research conducted by Coles revealed that about 75 percent of shoppers intend to spend the same or more on Christmas as in the previous year, although they are likely to economize in other areas of their budgets. This resilience in food and drink spending contrasts with caution in discretionary sectors, consistent with recent updates from retailers in those industries.

Weckert also noted Coles’ focus on supporting Australian food and drink producers, with nearly two-thirds of the exclusive Christmas range sourced from suppliers located in regional Australia. The retailer continues to prioritize its Australian food and drink program, aiming to assist small and medium-sized producers in expanding their market reach.