The increase follows year on year growth of 5.5 per cent in June.
Total retail spending was $23.311 billion in July, up from $23.217 billion in June.
Month on month growth was slower, rising by 0.4 per cent over June.
The highest increase in growth was seen in department stores, 1.9 per cent; followed by cafes, restaurants, and takeaway food services, 1.4 per cent; and clothing, footwear and personal accessory retailing, 0.1 per cent.
These rises were partially offset by falls in other retailing, 0.6 per cent; and household goods retailing, 0.2 per cent.
The biggest growth in turnover came out of NSW, which saw a rise of 0.7 per cent in retail sales, followed by Victoria, 0.6 per cent; South Australia, 0.4 per cent, Queensland, 0.1 per cent.
Norther Territory reported a 2.3 per cent drop in sales, while sales also fell in Tasmania, 0.4 per cent; and Western Australia, 0.1 per cent.
Executive director of the Australian Retailer Association, Russell Zimmerman, said that after an unseasonably warm start to winter and post-Federal Budget drop in consumer confidence, retailers saw only a slight upswing in sales in July – largely thanks to the change in weather and last minute EOFY sales.
“With the festive season right around the corner, the ARA is urging the Federal Government and RBA to do all that they can to ensure that retail trade is fully supported as we gear up toward the spring/summer racing season and the Christmas trading period,” Zimmerman said.
The National Retail Association said a second month of positive retail trade figures shows shoppers are getting over the Federal Budget blues, setting the scene for a better spring season and lead up to Christmas.
“It’s pleasing to see that consumers are showing signs of confidence once again, after a brief downturn in April and May – due largely to speculation around the possible impacts of the Budget,” NRA CEO, Trevor Evans, said.
“As time has passed, consumers have come to realise that the measures in the Budget are not as drastic as they had been led to believe, and they are hopefully starting to move out of the savings mindset they had adopted as a result of that initial reporting.
ANRA CEO, Margy Osmond, said despite the rise retailers still remain cautious.
“July’s figures have warmed up retailers’ hopes of reaching annual growth of six per cent by the end of the year. Retailers however remain cautious as consumers still have rising unemployment, soft consumer confidence and an unpredictable Senate weighing on their minds,” said Osmond.