The latest monthly spending figures from the Australian Bureau of Statistics (ABS) show fashion spending falling in July 2025 by 1.2 per cent.
The fashion category’s July drop joins similar spending falls in alcohol and tobacco (down 1.9 per cent) and home furnishings (down 1.4 per cent), with food retailing also slipping into the red, down 0.1 per cent.
Despite these drops, overall household spending rose 0.5 per cent in July, following a rise of 0.3 per cent in June and 1.0 per cent in May.
ABS head of business statistics Robert Ewing said household spending rose for the third month in a row in July, and has now gone up nine times in the last 10 months.
“Household spending is 5.1 per cent higher than the same time last year. This is the highest annual growth since November 2023,” Ewing said.
“Households spent more on health services, hotel accommodation, air travel, and dining out during July. This contributed to a 1.6 per cent rise for services spending.”
“In contrast, goods spending fell 0.3 per cent after mid-year sales boosted spending by 0.9 per cent in June.”
Five of the nine spending categories rose in July. This was led by health (up 1.8 per cent), with transport and miscellaneous goods and services close behind at 1.5 per cent respectively.
Year-on-year, retail spending grew by 4.6 per cent in July, hitting a total of $37.7 billion.
All categories experienced year-on-year growth, with ‘other’ retailing – hair salons, beauty salons and the like – experiencing the most significant increase, up 7.6 per cent. This is followed by cafes, restaurants and takeaway (up 6.7 per cent), department stores and large online retailers (up 6 per cent).
Fashion, footwear and accessories spending had the second-lowest growth of 3.24 per cent, lifting by $90 million to $2.87 billion. Food retailing had the lowest percentage growth, up 2.27 per cent, with a monetary lift of $330 million.
The Australian Retailers Association (ARA) CEO Chris Rodwell called it a solid start for the new fiscal year, adding these results maintain the higher spending trend seen across 2025.
“The challenge now is to sustain these better trading conditions, recognising that some retailers continue to confront difficult operating conditions,” Rodwell said.
“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.
“To add to this, we know many households are still under intense family budget pressures. With inflation remaining in the target band, it’s important the RBA remain vigilant to further opportunities for interest rate reductions.”
Rodwell said the cost of doing business and supply chain management also remain key challenges for retailers. This is off the back of ABS crime data which showed a surge in retail crime, particularly in Victoria and Tasmania. Rodwell said this adds a layer of cost and challenge that is unsustainable for retailers.
“That’s why we are championing the importance of regulatory and red tape reduction by Federal and State governments to help reduce some of the unnecessary costs which put upward pressure on prices,” he said.
“We would like to see a harmonised approach to payroll tax, planning, freight and logistics, environmental and waste regulation, and trading hours. We are also strongly advocating for a coordinated national approach to tackling retail crime, which conservatively adds at least $9 billion cost to retailers each year.”
The July figures are the first ABS statistics based on enhanced data from its Monthly Household Spending Indicator (MHSI), which has replaced the ABS Retail Trade data.
The ARA noted that whilst the MHSI provides broader and more timely insights into household consumption patterns, there is some variance in category data on the previous series.