Consumer spending between 6pm and 11pm surged about 5% during the recent heat wave, according to the study based on 200 million bank transactions.

Parts of the country were hit by an unprecedented heatwave in January, with record temperatures set in Victoria and temperatures exceeding 49 degrees in New South Wales and South Australia.

A peer-reviewed study recently published in Nature’s NPJ Urban Sustainability found that when a heatwave hits, Australians change their spending behavior to avoid the extreme conditions.

Millions of dollars lost in spending collapse due to daytime heat wave

The findings are based on anonymised Westpac Group bank card and EFTPOS data from more than 200 million transactions made by consumers in Sydney, Melbourne and Adelaide.

One of the authors, Shashi Karnanes, chief economist at data analysis consultancy Geographia, said the capitals were chosen because of their strong 24-hour and night-time economies.

Transaction data was re-weighted to take into account Westpac’s overall share of consumers in the Australian market and the spending habits of customers of other banks who used Westpac’s EFTPOS terminals to pay for products and services.

The researchers also used data from the Australian Bureau of Statistics census to come up with a figure that “represents the total expenditure of the population”.

Westpac says it serves more than 12.7 million customers and provides EFTPOS terminal services to more than 100,000 Australian businesses.

Dr Karunanethy said the study showed how behavior changed before and after hot days that occurred between January 1, 2023 and December 31, 2024.

Researchers found that there are days when the maximum temperature is 35 degrees or higher. The Japan Meteorological Agency classifies it as an “extremely hot day”a $5.4 million collapse in intraday consumer spending was recorded.

There was no evidence to suggest Australians changed their spending before the heatwave.

However, the study showed that people spent 2.4% more in the seven days following the high temperature.

“These findings suggest that heat shocks cause significant short-term disruptions to consumer activity,” the study authors said.

The findings also revealed that spending declines were primarily recorded in the early to late afternoon.

After taking into account people’s expectations for the heatwave and its subsequent recovery, researchers found that spending fell by 12.1% between noon and 3pm, and by 13.3% between 3pm and 6pm.

Consumer spending then rebounded the most in the seven days after the heatwave, between 6 p.m. and 9 p.m.

Dr Karunanethy said the findings showed Australians were adapting their lives to heat patterns, but were finding it difficult to prepare ahead of a heatwave.

“People have set work schedules and have to pick up their kids from school, so they can’t predict and easily adapt to climate change,” he says.

“It’s not easy for them to anticipate and necessarily adapt to heat events, but they can adapt later.

“This is the first quantitative evidence that people adapt to heat within a 24-hour economic cycle.

“They either go shopping late at night on the day of the heat event, or they shop the night before or the next morning.”

Where do Australians spend their money during a heatwave?

The study found that on hot days, consumers spent more time shopping for products in certain retail categories in the morning and mid-afternoon to early evening to avoid the heat.

Spending at bars and clubs between noon and 3pm increased by 10% on heatwave days and remained up to 20% higher than usual until late at night, the researchers found.

It also found that purchases of “packaged alcohol” such as beer, wine and spirits jumped by 50 percent between 6 a.m. and noon on heat wave days.

The study divided the 24-hour cycle into six- and three-hour windows to monitor consumer spending.

Dr Karunanethy said Australians were most likely to be purchasing packaged alcohol closer to noon than 6am during this time.

“This is a particularly Australian adaptation,” he says.

“One of the ways people adapted was to go to bars and chill there and have a drink.

The survey showed that spending on eating out fell sharply between 3pm and 6pm, but recovered by 9pm, while “specialty food retail” purchases at grocery stores, butchers and independent grocers declined the most between noon and 6pm.

Researchers said they found a “moderate increase” in spending in these two categories during the morning hours from midnight to noon, suggesting people tend to avoid shopping during peak high temperatures.

At entertainment venues such as movie theaters, consumer spending fell between 3pm and 6pm and recovered between 9pm and midnight.

And people seemed to avoid air-conditioned department stores and shopping centers in the afternoon, Dr. Karunanethy said.

“Department stores, even if they have air conditioning, are not immune to the effects of the climate, because people don’t necessarily want to travel in the heat just to go to a department store,” he said.

“I think it’s a bit of a misconception that people go to department stores because they have air conditioning.”

The importance of the nighttime economy

Dr Karunanethy said the findings show that cities that have extended retail store hours and introduced a more functional night-time economy to mitigate severe weather events such as heat waves continue to experience a level of “climate resilience”.

“It’s kind of like [a] When cities pursue a 24-hour economy, there is a nice side benefit: cities and societies can adapt in time. [and] It actually contributes to the overall resilience of the city to mitigate the economic impacts of climate change,” he said.

“Many regional cities, especially some capital cities, have restrictions on trading after certain hours and on weekends.

“The lesson from this is that when cities are experiencing some kind of climate change, lifting restrictions, even temporarily, becomes very important. [people] I like to stock up the night before in preparation for the next day’s weather, but the stores have to be open. ”

Nevertheless, Dr Karunanethy said there is evidence that cities are responding to this challenge.

“Heat waves are becoming more and more prevalent, shaping people’s behavior and driving them into various forms of antics. The question is whether our urban infrastructure can cope with it. Are we ready?”