Australian retail sales rose 5.7% in May 2026 year-on-year. The three-month rolling growth was 5.4% and for non-food retail it was 6.9%. These figures are all above long-term average growth of 4.9% for total retail and 4.4% for non-food retail. Given the persistence of strong growth, some may feel a downturn is unlikely. We expect the downturn in sales growth to be gradual and more evident late 2026 and early 2027 as income growth slows. Additional risks are building if house prices fall.