Australia’s household spending indicator fell 0.4% in February, undershooting economists’ expectations for a 0.1% rise in a Bloomberg survey, after a 1% increase in December.
The first monthly decline since March 2024 comes as households absorb back-to-back interest rate rises from the Reserve Bank, including this month’s hike.
However, the ABS said the earlier strength in spending likely reflected purchases being brought forward to coincide with major sales and cultural events.
“We saw high spending in October and November, which had major sales and cultural events boost spending,” the ABS said. “The fall in December indicates that households brought forward purchases during sales events in October and November.”
Cross category falls
Spending fell across a broad range of categories, including discretionary items such as electronics, clothing and furniture, as well as essentials like healthcare.
Health spending declined after several months of growth, which the ABS attributed partly to higher bulk-billing rates lowering households’ out-of-pocket costs.
By category, the largest fall was in clothing and footwear, down 2.4%, followed by furnishings and household equipment (down 1.7%) and health (down 1.3%).
Higher spending on new vehicles helped offset some of the overall decline, Mr Lay said.
On an annual basis, spending rose 5%, below expectations for a 5.8% lift and easing from 6.3% growth in December, though the ABS noted that “spending over the year remains high.”
Impact of Black Friday/Cyber Monday
In reaction to the ABS’ figures, Shaun Broughton, Managing Director, APAC and Japan at Shopify, said:
"Australian retail sales dipped during December’s festive period, but the ABS’ figures don’t necessarily represent a subdued end to the year, as spending volume rose 0.9% for the quarter. The figures also present a snapshot of consumer shopping habits. The strong November spending figures indicate that promotional periods like Black Friday and Cyber Monday (BFCM) were more popular than ever for value-driven holiday shopping, potentially influencing December’s lower numbers. The figures underline just how critical BFCM is to retailers, especially as it evolves from a sales week to a sales month (and beyond), showcasing how a successful peak season often ensures you end the year on a high.
"Also, looking ahead to 2026, Shopify data shows that three-quarters of Australian SMB retailers expect stronger results this year than in the previous 12 months. A key driver of this confidence is early adoption, with two in five retailers identifying as early-majority adopters of new tools and technologies, choosing to test and implement them ahead of the curve."