Retail spending jumped 4.6 per cent in July compared to the same time last year, with Australians splashing out $37.7 billion according to fresh Australian Bureau of Statistics (ABS) data.

The figures,  the first released under the ABS’s new Monthly Household Spending Indicator (MHSI),  show growth across every retail category, with cafes, restaurants, takeaway outlets and department stores among the biggest winners.

Where shoppers spent up

Other retailing saw the strongest rise, up 7.6 per cent year-on-year. Cafes, restaurants and takeaway followed closely with a 6.7 per cent lift, while department stores and large online retailers gained 6 per cent. Household goods were also in demand, climbing 5.4 per cent, with fashion spending up 3.2 per cent and food retailing growing 2.3 per cent.

State by state, Western Australia led the charge with a 6.9 per cent increase, followed by Queensland (6.1 per cent) and the Northern Territory (6.5 per cent). New South Wales and Victoria recorded more modest growth of 3.7 and 3.3 per cent, respectively.

A strong start to the financial year

Australian Retailers Association (ARA) CEO Chris Rodwell said the results signalled a “solid start” for the new fiscal year and confirmed the higher spending trend seen across 2025 so far.

“This is a solid start for the new fiscal year and maintains the higher spending trend we’ve seen across 2025,” Rodwell said.

But he also warned retailers – particularly smaller operators – not to get too comfortable.

“The challenge now is to sustain these better trading conditions, recognising that some retailers continue to confront difficult operating conditions,” he said.

Discretionary and small retailers under pressure

Rodwell highlighted that many families are still juggling tight budgets despite a lift in consumer confidence, and called on the Reserve Bank to consider future interest rate cuts to help ease cost-of-living stress.

“We are particularly concerned with supporting discretionary retailers and the country’s smaller retailers as we head towards peak season. It’s a time when many in our sector make up to two-thirds of their profits,” he said.

Retail crime and red tape in the spotlight

While spending is up, Rodwell pointed out that retailers are still battling challenges behind the scenes. The ARA is calling for governments to cut back on regulatory red tape in areas like payroll tax, planning, freight and logistics, and waste regulation to help bring down costs.

Retail crime is another hot-button issue, with the ARA estimating it costs the sector at least $9 billion a year.

“As the ABS crime data reinforced this week, there is also a shocking wave of retail crime around the country, adding a layer of cost and challenge that is unsustainable for retailers,” Rodwell said.

The July results will be welcomed by businesses heading into the busy spring and summer trading season. But with cost pressures, red tape and crime continuing to bite, many retailers, especially small independents, will be watching the next few months closely to see if consumers keep their wallets open.

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