Australian retail sales rose 5.3% for August 2026 on the same month a year ago. Once again, retail sales growth remains above long-term average. The only exception in August was weakness in department stores and discount department stores. Other discretionary categories like household goods, clothing, restaurants and cafes were all above trend. The extent of the sales strength will embolden the RBA to raise rates and slow pending. While sales trends are bound to slow, the downturn is likely to remain gradual. We remain cautious about the December 2026 quarter and expect a soft 2027 as well.