Australians are expected to spend a record amount at this year’s Boxing Day sales despite a cost-of-living crisis eating into wallets.

The Australian Retailers Association and Roy Morgan forecast $1.3 billion would go through the tills on Boxing Day — an increase of 1.8 per cent on last year.

Boxing Day to January 15 will also be a bonanza spending fortnight of $24.7 billion — up by 2.6 per cent.

This will include $296 million on food, $378 million on household goods and $197 million on clothing and footwear to make up the bulk of the sales spending.

NSW is expected to lead the charge, with shoppers ready to outlay $1.1 billion over five days.

Victorians are close behind, with an expected total of $951 million.

Queenslanders will spend $746 million, South Australians $234 million, Western Australians $410 million, Tasmanians $74 million, Territorians $33 million and shoppers in the ACT $69 million.

Australian Retailers Association spokeswoman Alexandra Keefe said the lift in spending was largely due to a population increase and rising prices.

Shoppers had also started their festive planning early.

“We’ve seen (shoppers) start to plan their Christmas gift lists as early as October and to start shopping in October as well,” Keefe said.

“Of course there’s going to be that last-minute shopper.”

The post-Christmas splurge follows a huge lead-up to Christmas, with each shopper expected to spending $707 — up $61 on the average recorded a year ago.

Shoppers hunting for gifts and prepping for festive gatherings were due to spend $69.8 billion.

After a challenging year, consumers were poised to fork out $28 million on plum pudding and turkey.

Clothing would account for $5.7 billion of shopping dollars and $10.8 billion would go towards other retail like recreational goods, books and cosmetics.

Gifts were forecast to be $11.8 billion this year, up $1.6 billion on last year’s figures.

ARA chief industry affairs officer Fleur Brown it was encouraging to see Australians embracing the festive season despite cost-of-living challenges.

“This peak season trading period is critical for retail, with many discretionary retailers making up to two thirds of their annual profit during peak season.

“Retailers have gone all out to ensure they have the best product lines and gift solutions, customer service offerings and enhanced online platforms to make shopping during this peak season more seamless than ever.

“We’ve seen Australians plan their festive periods earlier, with many ticking off their Christmas lists and commencing shopping in October.”

Still, conditions have been generally challenging for retailers.

Headline inflation has outstripped sales growth, rising 2.8 per cent in the year to September.

Purchasing habits have changed in recent years, with shoppers increasingly shifting their spending earlier in the discount season given the surge in popularity of Black Friday and Cyber Monday sales.

There is some optimism the Reserve Bank will lower the cash rate to 4.10 per cent at its next meeting in February, with the money market implying an almost three-quarters chance of a 25 basis point cut.

The minutes from the December meeting, released on Tuesday, could reinforce that view.

A rate cut would be good news for hotel operators, although accommodation providers still experienced strong booking growth this holiday period.

Nationally, bookings are up 4.6 per cent in December and four per cent in January from the same period last year.

While customers were still prioritising a holiday, they were looking for the best value they could find, according to Accommodation Australia chief executive James Goodwin.

“This is a solid result, particularly when we know family budgets are tight and international tourism has still not returned to pre-COVID levels,” he said.

-with AAP