Aussie consumers tighten purse strings despite EOFY discounts

End of financial year sales failed to deliver their usual retail sugar hit in June, with CommBank data suggesting Australians are becoming increasingly reluctant to spend despite widespread discounting.

The latest CommBank Household Spending Insights (HSI) Index showed household spending rose a modest 0.3% in June, with retail spending easing to 0.2% from 0.6% in May despite widespread EOFY discounting.

Compared with June last year, spending on household goods also softened, pointing to weaker consumer demand during one of retail's biggest promotional periods.

Hospitality spending also lost momentum, rising just 0.1% compared with 0.9% in May, while recreation spending slowed sharply from 2.3% growth in May to 0.2% in June, despite a packed sporting calendar.

Belinda Allen, head of Australian economics at CommBank, said household spending was expected to continue slowing over the remainder of the year.

"The softening we are seeing in the CommBank HSI is broadly in line with our expectation that household spending will slow over the remainder of this year," Allen said.

"Slower household income growth, together with the 'wealth effect' from a downturn in the housing market is expected to weigh on spending."

Allen said the weaker result suggested EOFY sales had less impact than they did in 2025.

"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," she said.

"The Iran war, the downturn in the housing market and higher interest rates continue to weigh on consumer spending."

For the first six months of 2026, average monthly household spending growth was 0.3%, down from an average of 0.5% throughout 2025.

The data also pointed to a growing divide between metropolitan and regional Australia, with regional spending accelerating over the past year while growth across metro NSW, Victoria and the ACT weakened.

Allen said softer home prices in those markets were beginning to affect consumer confidence and discretionary spending.

"Weaker spending in metro areas of NSW, Victoria and the ACT reflect the jurisdictions that recorded the weakest home price growth over the past 12 months, highlighting how the downturn in the housing market and higher interest rates are beginning to weigh on consumer spending," she said.