Spending increased in household goods retailing in July compared to last year (up 5.4 per cent), while overall retail spending totalled $37.7 billion, according to the Australian Bureau of Statistics.
Australian Retailers Association (ARA) CEO Chris Rodwell says it is a solid start for the new fiscal year and maintains 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,” he comments.
“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.”
KPMG national leader for turnaround and restructuring Gayle Dickerson adds that the noise surrounding US tariffs which has been dominating headlines over the past six months has begun to subside (for now at least).
“Australia’s general tariff rate holding at 10 per cent offers some breathing room, albeit the removal of the de minimis exemption is the most significant change, eliminating the previous duty-free threshold for shipments under $800,” she notes.
Many Australian retailers are responding by accelerating efforts to diversify their supply chains beyond the US and China, seeking greater resilience and flexibility. This strategic shift introduces new cost pressures and operational complexity.
“Profitability remains a challenge and insolvencies in the sector climbed to 1,152 cases in FY25, the highest in a decade, underscoring persistent cash flow pressures, with a number of high street brands impacted including Mosaic Group and Jeanswest.
Indeed, cost of doing business and supply chain remains a challenge, says Rodwell. As the ABS crime data reinforced this week, there is also a shocking wave of retail crime around the country, adding 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. 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.”
