The Australian national accounts for the June 2025 quarter explain the strength in retail sales over the same time period. In the quarter, household income rose 7.6% and the seasonally adjusted savings rate dropped by one percentage point. Broader consumer spending rose 4.8% in the June quarter and retail spending rose 4.2%, the strongest rate of growth in two years. Can the retail sales momentum continue? With income growth likely to slow in FY26e, a further drop in savings will be needed to support retail spending. We expect retail spending to rise 3.9% in FY26e, ahead of FY25 at 3.3% growth.