While retail trade rose in seasonally adjusted terms in June, the underlying trend in trade remains flat. Australian consumers continue to feel financial pressures from high interest rates and sticky services inflation. A small fall in spending in the cafe, food and takeaway sector will compound already very difficult conditions for cafe and restaurant owners. This sector already has the highest rate of business insolvencies, and we expect insolvency rates to continue to rise as long as interest rates remain at their current levels.
The retail sector overall will see mixed results in terms of insolvencies. Retailers that offer budget options and sell non discretionary items will fare much better than retailers that sell discretionary items.
Despite the small rise in household goods retailing, the slowdown in home completions coupled with the huge amount of pulled forward spending during COVID lockdowns will result in less demand in this sector.
![Anneke Thompson](https://creditorwatch.com.au/wp-content/uploads/2022/07/Anneke_Headshot_064_cropped-LinkedIn.jpg)
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