Fashion spending in Australia has grown by 6.6 per cent in July compared to the same time last year, new data from the Australian Bureau of Statistics reveals.
This added to a 6.1 per cent year-on-year lift for total retail spending according to the ABS Household Spending indicator, with retail sales hitting $40.13 billion.
Annual growth strengthened from 4.7 per cent in June, with the strongest gains coming from cafes, restaurants and takeaway food services (up 8.2 per cent), other retailing (up 7.9 per cent) and clothing, footwear and personal accessories (up 6.6 per cent).
Australian Retail Council chief economist Glenn Fahey said the result was encouraging after a softer June.
“This improvement on June shows Australian consumers are continuing to spend despite a challenging economic environment,” 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 Fahey said this needs to be taken in the right perspective. He said a growth of 6.1 per cent is broadly around what we have seen historically in nominal terms rather than an exceptional result.
He pointed to the latest inflation figures, which show that 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,” Fahey explained. “Once inflation is taken into account, real retail growth remains fairly modest."
New Deloitte Access Economics forecasts also show household consumption growth is expected to remain flat over the next year.
"Retailers are managing inflationary pressures flowing through the supply chain,” Fahey said. “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.”
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.
Meanwhile, department stores and large online retailers saw growth of 4.4 per cent between July 2025 and July 2026, hitting $1.7 billion. Food retailing grew 5 per cent to $15.7 billion, while household goods retailing grew 5.5 per cent to $6.6 billion.
Spending increased across all states and territories, with the Northern Territory and Western Australia recording the strongest growth at 10.2 per cent and 8 per cent respectively.
Meanwhile, the Australian Capital Territory (up 5 per cent), New South Wales (up 5.2 per cent) and Victoria (up 5.7 per cent) saw more moderate increases.
The other states were slightly more robust, with Queensland retail spending up 6.7 per cent, South Australia growing by 6.4 per cent and Tasmania up 6.9 per cent.