Australian Online Retail Sees Continued Growth in May Amidst Nationwide Spending Surge

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The data highlights notable growth across most retail categories, although homewares, appliances, and takeaway food did not follow the upwards trend. The Northern Territory and Victoria led the growth, posting increases of 4.9% and 1.9% respectively. Conversely, Western Australia and Tasmania saw minor declines of 0.3% each.

Sally Auld, Chief Economist at NAB, notes the slowdown in online spending compared to April’s strong figures. Fashion spending particularly rebounded significantly in May, with continued robust performances in grocery and liquor sales, particularly in New South Wales and Victoria, which dominate market sales in these categories.

This increase in online retail sales comes ahead of the Australian Bureau of Statistics' release of the retail sales figures for May. ANZ economists are predicting a 0.2% rise in retail turnover, following a slight decline in April.

The broader Australian retail market has faced a tepid start to the year. Despite the dual factors of declining inflation and interest rate cuts inflating disposable incomes, consumer sentiment is still dampened. The Reserve Bank of Australia cut the cash rate by 0.25 basis points to 3.85% in May, aiming to rejuvenate consumer confidence after numerous rate hikes since 2022.

Looking forward, there is anticipation that the RBA might consider further interest rate cuts in their upcoming meeting in early July, especially after the latest inflation reports signaling a deceleration. However, external global factors, including recent announcements around reduced trade tensions, continue to exert pressure on consumer sentiment, maintaining an overall cautious economic outlook.

Published:Thursday, 3rd Jul 2025
Source: Paige Estritori

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