Australian Retail Sales Weaken Despite an Increase in External Traffic, as Broader Economic Pressures Continued to Weigh on Overall Performance
Monthly KRI Summary
Discover key insights in the latest Australian Kepler Retail Market Index for March 2026.
Comparison Period: The following insights are based on comparing the four-week retail month of March this year (23rd February – 29th March 2026) to the same period last year (24th February – 30th March 2025).
It is important to note that the 2025 comparison period coincided with several major events:
- The Cyclone Alfred weather event resulted in temporary store closures and reduced trading hours across south-east Queensland and Northern NSW, inflating YoY trading activity for the first three weeks of the comparison period
- Ongoing global uncertainty, rising fuel prices, and subsequent increases in RBA interest rates have had a substantial impact on trading activity and consumer behaviour, with a noticeable decline in YoY trading metrics across all locations and categories. The impact of these factors was most pronounced in the final two weeks of the March retail month
Foot Traffic Trends:
- Passer-by traffic increased +3.1% YoY in March, reversing the softer trend seen over the past three months (3-month average: -0.8% YoY). This uplift was likely influenced by the prior year comparison period, which was impacted by temporary store closures during Cyclone Alfred
- In-store traffic decreased -0.6% YoY in March. However, this represents an improvement from February’s softer performance (-2.4% YoY), indicating relatively stronger customer engagement month-on-month. Despite this, shopfront conversion declined (-3.6%) highlighting that increased external traffic did not translate into stronger in-store traffic
Sales Conversion and Transactions Performance:
- Sales conversion declined by -2.3% YoY in March, representing a notable pullback from February’s near-flat result (-0.5%)
- Transactions decreased -2.9% YoY in March, broadly in line with February’s -2.8% decline, reflecting continued softness in converting
in-store engagement into completed purchases - The decline in both conversion and transactions is likely driven by ongoing global uncertainty and elevated fuel prices impacting consumer spending behaviour
Average Transaction Values (ATVs):
- Average Transaction Values (ATVs) decreased -0.9% YoY in March, reversing the 3-month average increase of +0.6% YoY. Lower transaction volumes have also contributed to reduced spend per transaction
Sales Performance:
- Sales declined -3.7% YoY in March, a further softening compared with February’s -1.0% YoY result. This reinforces that macroeconomic pressures, alongside declines in in-store traffic and transactions, have contributed to weaker overall sales performance this month
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
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