Massive EOFY sales fail to move needle for retailers as spending grinds to a halt

Massive end-of-financial-year discounts have failed to spark a spending spree as under-pressure households keep their wallets closed.

Fresh Commonwealth Bank data on Thursday revealed spending ticked up slightly from the 0.2 per cent growth in May to 0.3 per cent in June, showing this year’s EOFY sales were less impactful than 2025.

Spending on household goods — which include clothing and footwear, furniture and electronics — eased to 0.1 per cent in June from the 0.9 per cent lift in May.

Spending on hospitality also only rose marginally, indicating sporting events hosted through June did little to boost growth.

CBA head of Australian economics Belinda Allen said consumer spending had been weighed down by the US-Iran war, the downturn in the housing market and higher interest rates.

“The softening we are seeing in the CommBank (household spending insight) is broadly in line with our expectation that household spending will slow over the remainder of this year,” she said.

“Consumers may dip into their savings buffers which would see spending slow less than we expect.

“The last three months has seen some volatile moves in the HSI due to the up and down of petrol prices, seasonality around payments of bills for education and utilities as well the timing of sales.”

The Australian Retail Council had tipped around 6.1 million Australians to shop during the mid-year clearance discount season, with total spending expected to grow just 1.9 per cent this year to $10.7 billion.

The CBA data — based on payments from about seven million of its customers — also revealed cost-of-living pressures led to a rapid deceleration in recreational spending, which slumped from 2.3 per cent in May to just 0.2 per cent growth in June.

While June inflation figures were yet to be released, Ms Allen said the CPI was up 4 per cent in the year to May, meaning the 0.3 per cent lift in spending could just be due to rising costs over an increase in volume.

In the lead-up to the EOFY, households were hit with two major blows — another interest rate hike and a war-induced fuel crisis.

In May, the Reserve Bank lifted interest rates by 25 basis points for the third meeting in a row. The cash rate was kept on hold at 4.35 per cent last month.

“It’s not surprising to see spending growth slows, you would expect the three rate hikes so far to do something,” AMP economist My Bui said.

“It’s also necessary to see aggregate demand pull back a little bit, given that Australia’s supply capacity wasn’t keeping up with demand — hence higher inflation. We do expect to see momentum slowing even further into year end.”

The CBA data came the same day fresh Bankwest figures revealed West Australians bucked the broader national trend to splash cash during EOFY sales.

According to Bankwest, total spend increased 11.4 per cent, average transaction values rose 8.3 per cent, while the number of customers transacting jumped 2.8 per cent month-on-month in June.