Australian retail spending remained resilient in May, with new Australian Bureau of Statistics (ABS) data showing consumers continued to spend despite subdued confidence and ongoing cost-of-living pressures.
Retail spending increased 5.8 per cent over the year to May to $39.67 billion, with growth recorded across every retail category.
Australian Retail Council Chief Economist Glenn Fahey said the figures showed Australia’s retail sector continued to perform reasonably well despite households remaining under financial pressure. However, he noted that persistently high inflation means sales are more modest than the headline figure might suggest.
“May was a solid result and shows the retail sector is proving resilient, with consumers continuing to spend despite subdued confidence and ongoing cost-of-living pressures,” Mr Fahey said.
“While retail is still beating expectations overall, the impact of inflation must not be overlooked. Once inflation is taken into account, the pace of real sales growth is far more modest and reflects the difficult economic environment and continued pressure on household budgets.”
Spending increased across all states and territories, with the Northern Territory (+8.1%) and Western Australia (+7.3%) recording the strongest growth, while Victoria (+5.1%) and New South Wales (+5.3%) saw more moderate increases.
Mr Fahey said while the stronger than expected sales figures is encouraging for some retailers, it would not necessarily translate into stronger profitability.
“Sales growth doesn’t automatically mean profit growth. Retailers continue to face significant cost pressures across wages, freight, energy, leasing and broader supply chains, and those costs continue to erode already tight margins.
“While May was a robust month, we know retailers entered a much more subdued end-of-financial-year promotional period in June. Our forecasts continue to point to relatively weak EOFY sales growth, reflecting the fact consumers remain highly value-conscious and continue to carefully manage household budgets.”
Retail spending by industry group (May 2026 year-on-year change):
By state and territory:
About us: Australian Retail Council (ARC) represents a $444 billion sector that employs 1.4 million Australians across metropolitan, regional, and remote communities – making retail the largest private sector employer in the country and a significant contributor to the Australian economy. Our membership spans the full spectrum of Australian retail, from family-owned small and independent retailers that make up 95% of our membership, through to our largest national and international retailers that employ thousands of Australians and support both metropolitan and regional communities every day.
