The Australian national accounts for the December 2022 quarter foreshadow the dynamic that will play out in 2023. Wages growth is strong, but disposable income is weak. Consumers are also switching back to more normal spending habits with strong recovery in recreation. So far retail has not felt the effects, but under the surface there is already weakness. Retail sales growth of 9% year on year in the December quarter was largely a function of price. As we move into 2023, the fade in retail inflation contribute meaningfully to weaker sales growth. While savings rates are now below 2019 levels, the stored up savings from the last two years are still yet to be spent. For more, please see our report Retail forecasts for 2023 – Brace for Impact, January 2023.