Australian retail sales rose 5.5% in January 2026, a slight softening on recent trends, but still highlighting a strong consumer. Café, takeaway and restaurant sales rose 9.3%, clothing and footwear was up 6.5%. Once again supermarkets and liquor were the laggard at 3.5% growth. The reality is that sales growth momentum is likely to slow, but the January 2026 update is a reminder that the slowdown is likely to be gradual over the next six months.

Australian retail sales rose 4.1% in January 2025 with decent signs of growth across most categories. Liquor is still lagging, while hardware and electronics were softer than recent months. Pharmacy and recreational goods were the standout segments. We expect retail category and company divergence to rise over the next six months. Overall sales trends are likely to bounce around the 3%-4% mark, which is satisfactory growth, but still a challenge relative to cost growth.