Deloitte Access Economics Retail Forecasts

02 December 2025: This past weekend marks the passing of Black Friday and Cyber Monday sales, but it’s far from the end of the sales season. The question is, with inflation on the rise, whether households will temper their spending over the remainder of the holidays.

Releasing the latest edition of Deloitte Access Economics’ Retail Forecasts, Deloitte Access Economics partner and principal report author, David Rumbens, said: “With value front of mind, Australians have taken advantage of the start of the sales season, with the cash splurge expected to continue into the new year.

“Black Friday, and its expansion to a month-long affair for many retailers, has resulted in November being a critical month for Christmas shopping. Despite this, December won’t be completely left out in the cold, with almost a third of consumers planning to do most of their Christmas shopping in December.

“However, indicators point to a festive season that may be less jolly than anticipated a few months ago. Recent economic data has provided an early, and in the eyes of many, unwanted Christmas surprise.

“An inflation spike in the September quarter, and further in the month of October, was a double blow for households – purchasing power has declined and hopes of another rate cut anytime soon have been dashed. Indeed, it’s left many putting ‘good inflation data’ at the top of their Christmas list. Adding to consumer woes, the labour market has hit a flat patch, which may see job security become a concern for households.

“The good news is that households’ capacity to spend has actually been improving over the year. The resilience of household budgets means that despite the more dour economic news from the past few months, households remain in a relatively healthy position to spend if they want to.

“Households have now experienced two consecutive years of real wage growth despite the recent labour market easing. Additionally, cheaper credit has enabled households to increase savings and reduce debt, while rising household wealth – supported by elevated equity and property prices – has strengthened balance sheets.

“Overall growth in consumer spending is expected to be fairly strong in 2025-26 - 2.1% over the financial year - driven by Services and Recreation as consumers continue to place a high value on experiences.

“For retailers, the ‘winners’ for 2025-26 are expected to be those trading in more discretionary goods. Growth in real retail turnover over the financial year is expected to be led by Other retailing, which is expected to increase to 4.2%. This is anticipated to be followed by Department stores and large online retailers, and Household goods retailers, which are both expected to see real retail turnover increase by 2.8%.

“Retailers are expected to see a return to healthier growth in the coming years as economic conditions stabilise and years of real wage growth and improving cost of living enable consumers to spend more freely. Accordingly, real retail turnover is expected to increase from 1.7% in 2025-26 to 2.4% in 2026-27 – that would be the most substantial growth retailers have experienced since 2020-21.”

About Retail Forecasts
Retail Forecasts is produced quarterly and provides analysis of current retail spending and the economic drivers that influence this. It includes ten-year forecasts of retail sales by major category and of key economic drivers.

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