A fall in monthly spending within the clothing and footwear sector has driven an overall fall in total household spending across Australia in December 2025.
This is according to new seasonally adjusted data from the Australian Bureau of Statistics (ABS), which confirmed that household spending fell by 0.4 per cent in December last year, hitting $38.6 billion, following rises of 1 per cent in November and 1.4 per cent in October.
However, household spending over the year remains high, up 5.0 per cent compared to December 2024.
Month-on-month, clothing and footwear sales dropped by 2.4 per cent following strong rises in November and October of 2.5 per cent and 4.1 per cent respectively.
ABS head of business statistics Tom Lay said there was higher spending in October and November, which had major sales and cultural events to drive it, including Black Friday and Cyber Monday, as well as the Labour Day long weekend and Halloween.
“The fall in December indicates that households brought forward purchases during sales events in October and November,” Lay said. “These falls were across a range of categories, including discretionary items such as electronics, clothing and furniture, as well as essential items like healthcare.
“Health spending declined this month after several months of growth, partly due to higher bulk-billing rates reducing out-of-pocket costs for households.”
Across the states, clothing and footwear spending was down the most in Victoria (down 4 per cent), followed by the Australian Capital Territory (down 3.9 per cent) and New South Wales (down 3.4 per cent). Of note, fashion sales in the Northern Territory boomed by 5.8 per cent in December.
Spending across furnishings and household equipment was close behind fashion spending in December, down 1.7 per cent, and health dropped 1.3 per cent.
“Higher spending on new vehicles helped offset the decline in December,” Lay said.
Overall household spending fell in four out of the eight states and territories in December. Victoria (down 1 per cent) and New South Wales (down 0.6 per cent) recorded the largest drops, while the Northern Territory (up 2.9 per cent) had the biggest rise.
In year-on-year terms, cafes, restaurants and takeaway food services drove the overall lift in spending, the dining category up 8.2 per cent
More discretionary categories, such as clothing, household goods and department stores, recorded more modest gains.
Spending was uneven across the country. Queensland and Western Australia led annual growth at 6.3 per cent and 7.6 per cent, respectively, while New South Wales and Victoria grew by just over 3 per cent in the month.
The Australian Retail Council CEO, Chris Rodwell, weighed in on the results, saying consumers continue to be highly price sensitive.
“For retailers, December has historically carried much of the heavy lifting for the year,” Rodwell said. “When spending is pulled forward into earlier discount periods, it can place additional pressure on already thin margins.
“We’re not seeing the levels of consumer confidence that will sustain higher levels of spending. Households are chasing discounts, shopping earlier and tightly managing what they spend. Cost-of-living pressures are still very much front-of-mind. The recent interest rate rise will add to this uncertainty, further undercutting confidence for businesses and their customers.”
Rodwell said the concern is that short-term slowdowns could become a longer-lasting trend. This follows a patchy last few years during and after the COVID-19 pandemic.
With interest rates rising again this month, alongside mortgage costs increasing and energy rebates ending, Rodwell said consumer spending remains fragile.
“The cost of doing business continues to climb – from significant rent and wage increases to energy, insurance and supply chain costs, along with the intense cost of retail crime,” Rodwell said. “Families are under pressure, and businesses are having to work harder for every dollar.
“Urgent economic reform that eases the cost of doing business will be critical if we’re to avoid a broader slowdown in consumer spending.”
Meanwhile, the ABS reported that its household spending volumes indicator rose 0.9 per cent in the December quarter 2025.
When the prices of goods and services change significantly, measures of the amount of goods and services that were purchased, like the quarterly volumes indicator, can give more insights into household spending trends.
Lay said household spending volumes rose for the sixth quarter in a row.
“Discretionary categories such as clothing and footwear, and furnishing and household equipment, drove the rise, up 4.1 per cent and 3.6 per cent in December,” Lay said.
Household spending volumes rose 2.4 per cent compared to the December 2024 quarter, marking the strongest annual growth recorded in 2025.