Australian retail spending improved in July, with consumers continuing to spend despite subdued confidence and persistent pressure on household budgets.
Australian Retail Council analysis of Australian Bureau of Statistics Household Spending Indicator data shows retail spending reached $40.13 billion in July, up 6.1 per cent compared with the same month last year.
Annual growth strengthened from 4.7 per cent in June, with the strongest gains coming from cafes, restaurants and takeaway food services (+8.2%), other retailing (+7.9%) and clothing, footwear and personal accessories (+6.6%).
Australian Retail Council Chief Economist Glenn Fahey said the result was encouraging after a softer June.
“This improvement in June shows Australian consumers are continuing to spend despite a challenging economic environment,” Mr Fahey said. “Consumer confidence is also gradually recovering from the depths of the record lows seen earlier this year, with the latest ANZ-Roy Morgan July reading reaching its highest level since early March.
“But we need to keep this in perspective. Growth of 6.1 per cent is broadly around what we have seen historically in nominal terms rather than an exceptional result.
“The latest inflation figures also show why headline spending growth can overstate the overall health of the retail economy.
“Headline inflation is running at 3.5 per cent and underlying inflation at 3.6 per cent. Once inflation is taken into account, real retail growth remains fairly modest.”
New Deloitte Access Economics forecasts show household consumption growth is expected to remain flat over the next year.
“Retailers are managing inflationary pressures flowing through the supply chain. At the same time, Australians are making careful choices and looking closely at value before committing to discretionary purchases. That combination means margin pressure is likely to remain a defining feature as businesses move towards Black Friday and Christmas,” said Mr Fahey.
The latest Deloitte Retail Report, released today, reinforces that caution, with 34 per cent of consumers planning to restrict their spending this holiday season, 32 per cent intending to switch to cheaper options and 11 per cent expecting to delay purchases.
Retail spending by industry group – July 2026 compared with July 2025:
Spending increased across all states and territories, with the Northern Territory (+10.2%) and Western Australia (+8.0%) recording the strongest growth, while the Australian Capital Territory (+5.0%) and New South Wales (+5.2%) saw more moderate increases.
Retail spending by state and territory – July 2026 compared with July 2025:
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.
