Clothing retailers and department stores are off to a strong start this year.
Data released by the Australian Bureau of Statistics shows Australians spent $38.63 billion in January 2026, up from $36.79 billion a year earlier, pointing to resilient consumer spending following the peak Christmas trading period despite ongoing cost-of-living pressures.
Spending on clothing, footwear and personal accessories rose 6.1 per cent over the year, while department stores and large online retailers recorded growth of 3.7 per cent.
Across retail overall, cafés, restaurants and takeaway food services led growth, up 8.7 per cent year-on-year, followed by other retailing (up 7.8 per cent) and clothing, footwear and personal accessories (up 6.1 per cent).
Household goods retailing increased 4.1 per cent, while food retailing rose 2.8 per cent.
Australian Retail Council chief economist Glenn Fahey said the figures show households are continuing to spend despite ongoing pressure on budgets.
“January retail spending shows Australian households continue to spend carefully, with steady growth across all categories following the peak trading season,” Fahey said.
“Consumers remain highly price-sensitive and are continuing to prioritise value as they manage ongoing cost-of-living pressures.”
Spending growth was broadly consistent across the country. Western Australia recorded the strongest annual growth at 6.2 per cent, followed by Queensland (5.9 per cent), South Australia (5.1 per cent) and New South Wales (4.7 per cent).
Victoria recorded growth of 4.4 per cent, Tasmania 4.6 per cent, the Northern Territory 3.7 per cent and the ACT 2.8 per cent.
Fahey said the January figures were recorded before several developments that could affect consumer confidence in the months ahead.
“These figures were recorded before the Reserve Bank’s February interest rate increase and before the recent escalation of geopolitical tensions in the Middle East,” he said.
“If global instability leads to sustained increases in oil and energy prices, it could place further pressure on inflation and weigh on consumer confidence.”
Fahey said retailers are navigating these uncertainties while facing rising operating costs.
“Retailers are dealing with rising costs across energy, logistics, wages, rents and regulation, all while working hard to keep prices affordable for Australian households.”
In its pre-Budget submission, the Australian Retail Council has called on the Federal Government to reduce regulatory costs and support productivity in the sector.
“Retail employs more than 1.4 million Australians and plays a critical role in communities across the country,” Fahey said.
“It’s imperative that government policies back the retailers that back Australia — supporting investment, productivity, and the ability for businesses to keep prices competitive for consumers.”