AUSTRALIA | Australian retail spending remained resilient in May, with new Australian Bureau of Statistics (ABS) data showing consumers continued to spend despite subdued confidence and ongoing cost-of-living pressures.
Household spending rose 1.3 percent in May 2026, according to the seasonally adjusted figure. This followed a 1.1 percent fall in April and a 1.7 percent rise in March.
Tom Lay, ABS head of business statistics, said the rise in household spending largely reversed April's decline, reflecting a lift across all nine spending categories. Annual household spending increased by 5.5 percent compared to May 2025, up from the 5.1 percent annual rise in April.
Transport spending rose by 1.4 percent in May after falling 4.7 percent in April. This was mostly due to travel-related refunds returning to normal after being significantly elevated in April, driven by flight cancellations associated with the Middle East conflict.
“Excluding air transport spending, which was impacted by travel-related refunds, total household spending would have risen 0.6 percent,” said Lay.
Fuel spending remained elevated but has gradually eased from the March peak, as the impact of the halved fuel excise duty introduced in April continues to pass through to households.
Experimental data produced by the ABS suggested that the volume of fuel spending decreased by 0.4 percent in May, following a 2.1 percent rise in April.
There were strong rises in household spending across discretionary categories, including Hotels, cafes and restaurants (up 1.9 percent) and Clothing and footwear (up 2.7 percent).
Lay mentioned that this rise in spending at hotels, cafes and restaurants was driven primarily by catering services, including restaurant meals, takeaway and dining out. Demand was also likely supported by sporting and cultural events across Australia, as well as higher catering and hospitality prices.
At the same time, clothing and footwear spending rose in May following an April decline, driven by discounting across mid-season clearance, stocktake, and early-end-of-financial-year sales events offered by retailers.
A 1.1 percent rise in food spending also contributed to the May result, reversing an April fall due to higher grocery prices.
According to Australian Retail Council Chief Economist Glenn Fahey, the figures showed Australia’s retail sector continued to perform reasonably well despite households remaining under financial pressure. However, he noted that persistently high inflation means sales are more modest than the headline figure might suggest.
“While retail is still beating expectations overall, the impact of inflation must not be overlooked. Once inflation is taken into account, the pace of real sales growth is far more modest and reflects the difficult economic environment and continued pressure on household budgets.”
Spending increased across all states and territories, with the Northern Territory (+8.1 percent) and Western Australia (+7.3 percent) recording the strongest growth, while Victoria (+5.1 percent) and New South Wales (+5.3 percent) saw more moderate increases.
Fahey added that while the stronger-than-expected sales figures were encouraging for some retailers, they would not necessarily translate into stronger profitability.
“Sales growth doesn’t automatically mean profit growth. Retailers continue to face significant cost pressures across wages, freight, energy, leasing and broader supply chains, and those costs continue to erode already tight margins,” added Fahey.
“While May was a robust month, we know retailers entered a much more subdued end-of-financial-year promotional period in June. Our forecasts continue to point to relatively weak EOFY sales growth, reflecting the fact consumers remain highly value-conscious and continue to carefully manage household budgets.”
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