Retail spending in Australia rose 4.6 per cent in July compared with the same month last year, reaching $37.7 billion, according to the latest report from the Australian Bureau of Statistics (ABS).

All retail categories recorded year-on-year growth. The strongest increase came from other retailing, up 7.6 per cent, followed by cafes, restaurants and takeaway, up 6.7 per cent, and department stores and large online retailers, up 6 per cent.

Meanwhile, household goods retailing rose 5.4 per cent, clothing, footwear and accessories 3.2 per cent, and food retailing 2.3 per cent.

Australian Retailers Association (ARA) CEO Chris Rodwell described the results as “a solid start for the new fiscal year,” while noting challenges ahead.

“We are particularly concerned with supporting discretionary retailers and the country’s smaller retailers as we head towards peak season,” he remarked.

“It’s a time when many in our sector make up to two-thirds of their profits.”

Rodwell said households remain under pressure and urged the Reserve Bank of Australia to stay alert to opportunities for further interest rate cuts. He also flagged supply chain costs and rising retail crime as ongoing risks.

“As the ABS crime data reinforced this week, there is also a shocking wave of retail crime around the country, adding a layer of cost and challenge that is unsustainable for retailers,” he continued.

In light of this, ARA is calling on governments to reduce red tape and harmonise regulations across payroll tax, planning, freight and logistics, and environmental compliance.

“We are strongly advocating for a coordinated national approach to tackling retail crime, which conservatively adds at least $9 billion to retailers each year,” Rodwell concluded.