Australian retail inflation is proving volatile overall, but it is subsiding in retail, which does present downside risk to retail sales growth.  In the September 2025 quarter overall CPI was 3.2% while retail inflation was 2.4%.  Non-food retail inflation has dropped to 0.3% on our calculations, with further downside likely over the next year. The combination of higher inflation across the economy and weaker inflation in retail products is not helpful for retailers. Lower retail inflation constrains sales growth, while the RBA is likely to delay any rate cuts given higher living costs.