Australian retail sales surged to their strongest rise since March 2022 after posting a 1.2% lift in June, well above the 0.5% increase expected. Mid-year sales discounting and the release of the Nintendo Switch 2 were key factors that prompted cautious households to loosen the purse strings on discretionary purchases. This was a stellar result for the retail sales series to sign off its 75-year history on, with the ABS now shifting to a broader measure of monthly household spending.
Retail sales accelerated by 1.2% to $37.9bn in June, up 4.5% on 12 months ago. This was the fastest month-on-month rise for retail sales since March 2022, driven by discretionary sales that rose at a 19-month high (1.4%). In addition, sales growth for May was revised up from 0.2% to 0.5%. Retail sales were up 1% overall across the quarter, with monthly gains averaging 0.6% in the period - its strongest momentum by that measure since September 2022.
The media release from the ABS reported that mid-year sales boosted spending on big ticket items including furniture (3%) and electronic goods (3.9%), the latter also supported by the launch of the Nintendo Switch 2. Clothing sales also lifted sharply (2%) due to discounting on winter lines.
As noted, retail sales rose by 1% overall for the June quarter. Growth in underlying volumes - sales adjusted for inflation - was 0.3%, a modest rise but above expectations for a 0.1% lift. Retail price growth eased to 0.6% in the June quarter and 2.4% over the year, down from 2.7% previously. This compares to headline inflation that was reported yesterday to be at 2.1% (see here).
The key driver of volume growth in the quarter was household goods, driven by discounting. Volumes overall rose by 1.5% over the year - a vast improvement on their -0.3% pace 12 months ago. Historically, the volume data has flowed through to household consumption in the National Accounts; however, the ABS ceased this process at the end of 2024.
At the peak of the inflation surge, retail prices were rising by more than 7% year-on-year. A weaker demand backdrop and improved supply chains have been key factors in easing price pressures in the sector.
At the state level, households in New South Wales came out to play - nominal sales there rising by 1.6% in June, their sharpest rise going all the way back to February 2022. Sales in Victoria and Queensland lifted by 1.2%. Western Australia has shown the most consistent profile for sales growth in 2025, though interestingly sales there slowed to 0.3% in the latest month.
