Australian retail spending up 5.8% in May amidst cost-of-living pressures

All retail categories recorded annual sales growth.

Australian retail spending rose 5.8% year-on-year to $39.67b in May, according to new data from the Australian Bureau of Statistics (ABS).

Growth was recorded across all retail categories and in every state and territory. The Northern Territory posted the strongest increase at 8.1%, followed by Western Australia at 7.3%. Victoria and New South Wales recorded growth of 5.1% and 5.3%, respectively.

Australian Retail Council Chief Economist Glenn Fahey said the figures showed consumer spending remained resilient despite ongoing cost-of-living pressures and subdued confidence.

“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,” he said.

Fahey said inflation continued to weigh on real sales growth, with the increase in spending more modest after accounting for higher prices.

He added that stronger sales did not necessarily mean higher profits, as retailers continued to face rising costs, including wages, freight, energy, leasing and supply chain expenses.

“Whilst May was a robust month, we know retailers entered a much more subdued end-of-financial-year promotional period in June,” Fahey said. “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.”