Australia’s largest retailers have issued warnings about deteriorating consumer conditions amid rising living costs and interest rates, signaling a challenging period ahead for the country’s $444 billion retail sector.
Woolworths revealed that around 40 percent of Australian households are struggling to make ends meet following four interest rate hikes this year, with a fifth rate increase expected next week likely to exacerbate financial pressures. Addressing shareholders at the company’s annual general meeting in Sydney, Woolworths CEO Amanda Bardwell cited internal monthly surveys indicating a steady level of financial strain among customers since at least 2024.
The broader retail sector echoed these concerns during annual general meetings and trading updates on Thursday. JB Hi-Fi, Super Retail Group, and Wesfarmers—owner of major retail brands including Bunnings, Kmart, Target, and Officeworks—reported signs of softening sales and weakened consumer demand.
JB Hi-Fi’s Australian arm recorded a 0.4 percent decline in total sales growth in the July-September quarter, with same-store sales dropping 1.4 percent. The company’s bathroom and kitchen fittings chain, e&s, experienced a sharper 4.5 percent fall in comparable sales. In response, JB Hi-Fi CEO Nick Wells, speaking at the company’s Melbourne AGM, warned that an additional interest rate hike would further undermine consumer confidence heading into the critical Christmas trading season. “It wouldn’t be helpful. We’ve had four already, and another one would present another challenge for the consumer,” he said.
Super Retail Group also painted a grim picture, with revenue from key chains Rebel, Boating Camping Fishing, and Macpac declining or barely growing in the first quarter. Rebel’s same-store sales rose modestly by 0.3 percent, while Boating Camping Fishing sales dropped 1.1 percent and Macpac sales fell sharply by 11.7 percent. The group’s Supercheap Auto unit stood out with a 2.5 percent sales increase. Super Retail CEO Paul Bradshaw, speaking at the Brisbane AGM, described consumer pressure as multifaceted, extending beyond rising interest rates to immediately felt cost increases such as fuel. He recounted a conversation with an employee citing a weekly petrol and diesel fuel cost rise exceeding $80, with further price increases set to reduce disposable incomes directly.
Wesfarmers, which owns Bunnings, reported moderated sales growth since the latter half of the 2026 financial year. CEO Rob Scott, addressing stakeholders in Perth, stressed the ongoing impact of elevated inflation and higher borrowing costs on household budgets and business demand. “Elevated inflation and higher interest rates continue to impact demand in parts of the Australian economy and are placing pressure on household and business budgets,” Scott said, highlighting the challenges facing the company’s largest retail operation.
Investor reactions to the trading updates were negative, with shares in Wesfarmers falling about 4 percent, JB Hi-Fi nearly 3 percent lower, and Super Retail down close to 3 percent, reflecting concerns about near-term retail performance in a strained economic environment.