Retail spending is predicted to increase during the forthcoming back-to-school period. However, it’s set to come from a smaller pool of shoppers, according to the Australian Retailers Association (ARA).

Data collected by the ARA and Roy Morgan said that 21 per cent of Australian adults (4.5 million people) plan to make back-to-school purchases. Last year’s figure was 5.1 million people.

But overall spending is expected to increase to $2.9 billion nationwide, up $200 million from 2025. The change comes from a 9.1 per cent increase in average spend.

The ARA said this points to a “worrying” pattern.

“Back-to-school is the first major seasonal moment for retail after Boxing Day and peak-season trading,” ARA CEO Chris Rodwell said.

“While these are largely essential purchases, they provide important early-year momentum for many retailers.

“At the same time, we are seeing fewer households participating in major retail events in the past year, while those that can afford to spend are spending more. It’s a narrowing market, and it reflects the pressure many families remain under.” 

Back-to-school purchasing trends continue to favour physical retail, with 60 per cent of shoppers planning to buy in-store. School uniform is the top purchase priority for 56 per cent of shoppers, followed by stationery, footwear, and then books.

“With 600,000 fewer Australians able to take part in essential school spending this year, it’s a strong sign some household budgets are still under stress,” Rodwell added.