Australian retail sales rose 5.7% year-on-year in March 2026, which is an improvement on February growth, despite the spike in petrol prices and interest rates. It is noteworthy that discretionary categories like department stores and fashion did well. Cafes, restaurants and takeaway food sales were also strong. We expect some dip in April, but only by 1-2 percentage points, which suggests consumer spending is yet to slow much in response to economic headwinds. The slowdown will take time and be more evident in the December 2026 half-year in our view.