What: Australia's retail sector demonstrates resilience with 4% growth in March, led by cosmetics and recreational goods, while navigating weather disruptions and consumer pressures.

Why it is important: This growth demonstrates the retail sector's adaptability in facing multiple challenges, from extreme weather events to economic pressures, while maintaining positive momentum across diverse retail categories

Australian retail spending reached $37.3 billion in March 2025, marking a 4% increase compared to the previous year. The growth was broad-based, with the 'other retailing' segment, including cosmetics, sports, and recreational goods, leading at 9%. Clothing, footwear, and accessories followed with a 5% increase, while food items, department stores, and household goods each achieved 4% growth. The food service sector showed more modest gains at 1%. Despite these positive figures, industry leaders remain cautious about ongoing challenges. Fleur Brown of the Australian Retailers Association highlighted persistent cost-of-living pressures and economic uncertainty affecting consumer behavior. Additionally, extreme weather conditions in Queensland and New South Wales significantly impacted operations, with Lindsay Carroll of the National Retail Association emphasising the need for improved support mechanisms to help retailers navigate such disruptions without compromising their business viability.

IADS Notes: Australia's March 2025 retail performance reflects significant shifts in the retail landscape. The 4% year-on-year growth demonstrates resilience amid challenging conditions, particularly notable given February 2025's strategic transformation of major department stores through consolidation, as evidenced by Myer's A$864 million merger. The varied category performance, led by 'other retailing' at 9% and clothing at 5%, mirrors broader industry trends identified in December 2024, showing evolving consumer preferences. Weather-related disruptions in Queensland and NSW echo May 2024's findings about increasing climate impacts on retail operations, a trend forcing retailers to develop more robust contingency plans. The industry's response to these challenges, including enhanced support measures and adaptation strategies, aligns with February 2025's observations about retailers focusing on omnichannel innovation and digital transformation to maintain growth despite ongoing cost-of-living pressures and economic uncertainties.

Australia sees 4% surge in retail spending this March