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ANZ analysts note that the Australian households are moving their spending away from retail to other goods and services.

Key Quotes

“Flat wages and rising prices of utilities, health and education are adding pressure to household budgets.”

“The ‘new normal’ in retail is fierce competition for a smaller share of household spending.”

“Rising food prices have squeezed consumers in recent quarters, leading to stronger expenditure growth in “essentials” and a squeeze on discretionary spending.”

“Food related category growth is mostly due to price, whereas technology and competition is encouraging higher discretionary volumes, by keeping discretionary prices down.”