Strong Conversion Cushions Sales Decline Despite
Highest Interest Rates in a Decade
Monthly KRI Summary
Discover key insights in the latest Australian Kepler Retail Market Index for June 2026.
Comparison Period: The following insights are based on comparing the five-week retail month of June this year (25th May – 28th June 2026) to the same period last year (26th May – 29th June 2025).
- Despite easing geopolitical tensions and the RBA’s decision to hold interest rates 16 June, the month remained shaped by elevated fuel costs and interest rates sitting at a decade high. While much of this pressure was absorbed earlier in the year, June saw a clearer flow-on impact into retail performance
- Sales softness reflects increasingly selective purchasing behaviour, with customers prioritising targeted promotions and value-driven purchases over discretionary browsing. Importantly, conversion remained resilient, pointing to continued willingness to buy once in-store
- Flat ATV alongside declining passer-by and in-store traffic highlights a clear behavioural shift; fewer visits overall, but stronger intent among those who do enter stores
- Notably, that at the end of June, consumer sentiment showed late-month improvement, with more households expecting an improved financial position over the year ahead, suggesting early signs of stabilisation
Foot Traffic Trends:
- Passer-by traffic declined by -2.3% YoY in June, compared to the three-month average of -0.4% YoY. This uplift may reflect reduced travel activity amid higher fuel prices and more considered spending behaviour
- In-store traffic also fell by -2.8% YoY in June, a significant decrease from the three-month average decline of -0.1% YoY. This aligns with weaker passer-by traffic, suggesting all types of locations are seeing lower frequency visits
Sales Conversion Performance:
- Sales conversion increased by +2.4% YoY in June. Sustained weekly growth in conversion suggests customers continue to purchase once in-store, supported by EOFY promotional activity and heightened price sensitivity
Average Transaction Values (ATVs):
- Average transactions values were broadly flat, declining slightly by -0.5% YoY, below the three-month average growth of +0.7% YoY. This indicates continued caution in basket sizes despite maintaining purchasing intent
Sales Performance:
- Overall sales decreased by -0.9% YoY in June, despite the weaker traffic conditions. Strong conversion performance helped mitigate the overall decline, reinforcing that customers remain willing to spend when they enter stores, although they are becoming increasingly selective and less inclined to browse without making a purchase
About Kepler’s Retail Market Index
- Kepler’s Retail Market Index provides the most insightful and most timely view of retail industry performance across both Australia and New Zealand
- The index is based on anonymised data from Kepler’s Retail Foot Traffic Solution customers, primarily non-food specialty retailers
Want to know more? Get in touch or subscribe to the Kepler Retail Market Index
