Australia’s retail sector continued its upward trajectory in October, with new data from the Australian Bureau of Statistics showing a 5.7 per cent annual rise in retail spending. The Australian Retailers Association (ARA) and National Retail Association (NRA) said the results point to solid momentum in the sector despite a sensitive economic climate and ongoing uncertainty surrounding interest rate movements.

Seasonally adjusted spending rose to $38.50 billion for the month, up from $36.42 billion in October 2024.

Growth was recorded across all major retail categories, led by cafés, restaurants and takeaway food services, which climbed 8.3 per cent. Other categories also performed strongly, including other retailing such as online and recreational goods, up 7.3 per cent, household goods retailing, up 6.8 per cent, department stores and large online retailers, up 6.7 per cent, clothing, footwear and personal accessories, up 5.6 per cent, and food retailing, up 3.6 per cent.

Retail activity strengthened across the states and territories as well. Western Australia led the nation with a 7.6 per cent rise, followed by Queensland at 6.7 per cent, South Australia and New South Wales both at 5.6 per cent, the Northern Territory at 5.5 per cent, Victoria at 4.6 per cent, Tasmania at 3.8 per cent, and the ACT at 2.9 per cent.

ARA CEO Chris Rodwell said the results highlight a steady improvement after an extended period of subdued spending.

“This is a robust result in what remains a challenging retail landscape. It reflects the steady growth that has characterised this year. October spending likely reflects a trend towards early Christmas shopping as households look to balance their budgets through the peak season period,” Mr Rodwell said. “ARA-Roy Morgan data predicted that more than half of gift buyers had already made purchases by mid-October.”

However, he warned that underlying conditions remain sensitive.

“Spending conditions remain uncertain with mixed signals regarding interest rates and that is keeping some households cautious,” he said. “Even so, it is pleasing to see such resilience which shows that retailers are steadily returning to growth despite the challenges.”

With the peak trading season now underway, Mr Rodwell said the coming weeks will be decisive for many businesses.

“Christmas trading is make-or-break for many retailers in discretionary categories. A solid October gives retailers the confidence to plan, roster and stock appropriately, but every week from here counts. Retailers are working extremely hard to deliver value and service, and consumers are responding.”

He also encouraged Australians to support local businesses during the festive period.

“Local retailers invest in Australian jobs and communities. We continue to urge shoppers to get behind the businesses that contribute to our economy, particularly as ultra-cheap offshore platforms grow market share without meeting the same regulatory, governance or employment obligations.”