Latest Blog Post

Navigating Consumer Spending Amidst Cost of Living Pressures: Insights from July 2023 Retail Trade Results

July 2023 Retail Trade Insights

The recently released July 2023 Retail Trade figures have provided a glimpse into the complex dynamics of consumer spending amidst growing cost of living pressures. The data reveals a mixed bag of results as households across the country grapple with budget constraints and shifting economic factors.

Mixed Growth Amidst Challenging Economic Climate

Surprisingly, the overall seasonally adjusted retail trade saw a 2.27% increase compared to July 2022. However, this growth is juxtaposed against the backdrop of households facing mounting cost of living pressures. One notable impact is observed in the Household Goods category, which experienced a noteworthy reduction in consumer spending, with seasonally adjusted figures down by 3.84%. Similarly, Department Stores saw relatively stagnant growth, with figures aligning closely with those of July 2022, showing only a marginal increase of 0.13%.

Resilient Sectors Defying the Trend

Amidst these challenges, specific sectors have managed to defy the trend and display resilience in the face of economic uncertainties. The Café, Restaurants, and Takeaway Food category notably recorded a substantial seasonally adjusted increase of 9.18% compared to July 2022. This growth could be attributed to changing consumer behaviour, with individuals opting for more affordable dining-out options instead of other discretionary spending. Additionally, the Food category also exhibited a positive trend, recording a 5.02% increase, showcasing the consistent demand for essential goods despite the financial constraints faced by consumers.

Impact on Monetary Policy and Inflation

The broader economic context, including the surprising downturn in the annual inflation rate to 4.9% in July, adds further complexity to the situation. This decrease in the inflation rate has intensified pressure on the Reserve Bank of Australia (RBA) to maintain the cash rate at 4.1%. The RBA’s delicate balancing act between fostering economic growth and containing inflation becomes increasingly challenging as the data suggests mixed signals from the retail sector.

Monthly turnover, current prices - seasonally adjusted estimate (1)

State-Level Variations Reflect Regional Realities

The state-level analysis further underscores the nuanced nature of the retail landscape. The Australian Capital Territory (ACT) emerged as the outlier, boasting an impressive seasonally adjusted growth rate of +6.42%. Other states witnessed varying degrees of growth: New South Wales (+1.84%), Victoria (+2.6%), Queensland (+0.79%), South Australia (+4.34%), Western Australia (+3.74%), Tasmania (+1.19%), and the Northern Territory (+3.61%). These disparities in growth reflect the diverse impact of interest rate uncertainty and cost of living pressures across regions.


In conclusion, the July 2023 Retail Trade figures paint a complex picture of consumer spending patterns in the face of mounting cost of living pressures. While specific categories have shown resilience and growth, others have experienced declines. As the economy navigates the delicate balance between inflation and growth, the role of the RBA in managing interest rates becomes even more crucial, impacting the decisions of consumers and businesses alike.