Australia's Retail Growth Stalls: Below Expectations in May

Reaching A$37. 3 billion, Australia's retail sales in May 2025 increased 0. 2% month-on - month. Though consistent with March's performance, this growth rate trailed market expectations of a 0. 3% increase and followed a flat April. At 3. 3%, the sales rise for the year slowed to the slowest rate since November 2021 and dropped from 3. 8% in April.

Discretionary spending categories were the main engines of this little increase. With a rise of 2. 9%, apparel, footwear, and personal accessories sales rebounded strongly; department store sales also increased by 2. 6%. Other industries, however, showed weakness: food retailing experienced its first decline of the year, falling by 0. 4%; household goods retailing remained flat; and other retailing categories saw a 0. 2% decrease. Cafes, restaurants, and takeaway food services reported no change.

At 0. 7%, Western Australia spearheaded the country geographically with the most growth, while Tasmania saw a little fall of 0. 1% and the Northern Territory remained steady. The weak-than-expected retail sales data and subdued overall consumer spending, especially clear in food-related industries, will likely support forecasts for extra Reserve Bank of Australia interest rate reductions.