Champagne sits on the counter of Vintage Cellars in the upmarket Melbourne suburb of South Yarra
© AFP/File William West MELBOURNE (AFP) - Businesses also report that consumers are scrapping plans to holiday overseas and purchase new televisions because they are spooked by the free-falling currency.
The Aussie closed at 63.91 US cents Friday against a resurgent greenback -- down more than 30 percent since a mid-July high of 98.5 US cents.
Economists such as ANZ's Katie Dean predict a further fall to 60 US cents is almost certain as prices for Australian commodities continue to drop, with some even predicting it could sink as low as 50 US cents in coming months.
Qantas Airways chief executive Geoff Dixon last week reflected the sombre mood among businesses affected by the Australian dollar's woes when he boarded the airline's inaugural A380 flight in Sydney.
"There is a lessening in demand in all classes," he told reporters.
Qantas subsequently released a statement confirming forward bookings on international flights were down, citing the falling dollar as the major factor behind the trend.
Electronics and furniture retailer Harvey Norman enjoyed strong sales as the dollar approached parity with the US currency earlier this year and shoppers snapped up televisions and computers imported from China.
However, chairman Gerry Harvey last week reported sales in October dropped 5.8 percent on last year, commenting "retail margins continue to be under pressure."
One of Australia's largest independent liquor retailers, Sydney-based Kemeny's, said sales of top-shelf imported goods such as French champagne were suffering as customers tightened their belts.
"Sales (of champagne) have slowed down, the market's been flat for a couple of months and we still haven't seen the full price change come through," Kemeny's marketing manager Michael Martin said.
Martin said Australians were likely to usher in the New Year with a bottle of local sparkling wine, rather than a French champagne.
"We're preparing our brochures and promotional material for the festive period now and the emphasis is very much on the cheaper end of the market," he said.
"I've been in this business a long time and it was the same in the last recession in the early 1990s -- imports were hit hardest."
Online retailers have also been affected, according to eBay Australia.
While unwilling to release sales figures, eBay spokesman Daniel Feiler said it was clear customers were purchasing local goods rather than those from overseas as the purchasing power of the Australian dollar dwindled.
"It's mainly small items such as media and clothing," he said.
The Westpac-Melbourne Institute consumer sentiment index plummeted 11 percent in October, a fall the survey's compilers said was exceeded in recent history by only the 1987 market crash and the end of the dot com boom.
Westpac chief economist Bill Evans said the falling dollar combined with extreme sharemarket volatility meant consumers were curbing spending.
The survey showed that the amount of people who believed it was a good time to purchase a major household item fell 19.7 percent in October to its lowest reading in 33 years, a result Evans described as "alarming".
"News on the sharemarket and the Australian dollar would have concerned consumers," he said. "Both markets were volatile."
However, Kemeny's Martin said it was not all doom and gloom across the retail sector.
"People still like a drink," he said. "They might not go for the 20 dollar imported bottle but chances are they'll buy two or three of the five dollar Australian ones instead."
©AFP