{"id":945272,"date":"2026-10-29T15:02:31","date_gmt":"2026-10-29T15:02:31","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/945272\/"},"modified":"2026-10-29T15:02:31","modified_gmt":"2026-10-29T15:02:31","slug":"cost-of-living-crisis-how-rising-inflation-interest-rates-and-retail-sales-slumps-are-impacting-australian-households","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/945272\/","title":{"rendered":"Cost-of-living crisis: How rising inflation, interest rates and retail sales slumps are impacting Australian households"},"content":{"rendered":"

Opinion<\/p>\n

\"ColinColin Kruger<\/a>Senior business reporter<\/p>\n

October 29, 2026 \u2014 3:24pm<\/p>\n

October 29, 2026 \u2014 3:24pm<\/p>\n

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If you hadn\u2019t guessed already, Australia\u2019s top retailers can confirm we\u2019re all doing it pretty tough at the moment.<\/p>\n

On Wednesday, Woolies boss Amanda Bardwell told investors that despite a drop in the average price of the supermarket\u2019s groceries, customers are shopping around more keenly than ever and only showing loyalty to the cheapest deal.<\/p>\n

\"PricesPrices are going up and up, and so are interest rates.Louie Douvis<\/p>\n

\u201cThe amount of pressure on young families, particularly, and families more broadly is increasing,\u201d Bardwell says.<\/p>\n

Mince has never been more popular \u2013 Woolies\u2019 sales are up significantly \u2013 as families try to keep their bellies full on cheaper protein.<\/p>\n

It looks like the soaring price of lamb chops and steak will be the proverbial barbecue stopper this summer.<\/p>\n

But it\u2019s more sobering than that, with the news this week that food insecurity is a reality in middle-income families<\/a>. One in three households are going hungry as the cost-of-living crisis bites, a Foodbank survey has found.<\/p>\n

Related Article\"Chalmers<\/a><\/p>\n

And don\u2019t expect this pressure to ease. El Nino is adding to the risk of even higher food prices, with reduced rainfall and higher temperatures expected to hit livestock and crop production.<\/p>\n

But the price shock doesn\u2019t stop at the kitchen table.<\/p>\n

On Thursday, shopping bellwethers JB Hi-Fi, Rebel sports chain owner Super Retail and Bunnings joined the chorus of retailers pointing to the impact of the cost-of-living crisis on their sales.<\/p>\n

Preparations for festive season bargain hunting may have helped send sales into reverse in the September quarter at JB Hi-Fi\u2019s electronic retail franchise in Australia.<\/p>\n

\u201cThe group continues to see variability in trading and heightened competitive activity, with customers remaining focused on value and increasingly shopping during promotional events,\u201d chief executive Nick Wells told investors at its annual meeting.<\/p>\n

\"RBARBA Governor Michele Bullock looks set to announce yet another rate hike next week.Louise Kennerley<\/p>\n

\u201cIn October, the group has seen sales slow ahead of the important Black Friday and Christmas trading periods.\u201d<\/p>\n

Even Wesfarmers\u2019 rock star businesses Bunnings and Kmart are feeling the pain from shoppers\u2019 constraint.<\/p>\n

Wesfarmers boss Rob Scott told his fellow shareholders in Perth how \u201cpersistent cost pressures with elevated inflation and rising interest rates\u201d have created a moderation in retail demand.<\/p>\n

He said the group had noted at its full-year results in August how the uncertain outlook for inflation, house prices, interest rates and tax settings were weighing on consumer sentiment.<\/p>\n

Since then, the Reserve Bank has lifted rates yet again, and a fifth rate hike for the year is expected on Melbourne Cup Day<\/a>. It will only worsen the pressure on household and business budgets.<\/p>\n

Add in a shock inflation result this week, and the only question is how much worse is it about to get. Some economists are already forecasting that a rate rise next week may not be the last, after the Australian Bureau of Statistics reported inflation climbed to a higher-than-expected 4.3 per cent in September.<\/p>\n<\/p>\n

US President Donald Trump\u2019s war in the Middle East continues to send energy prices much higher than the RBA had assumed in August.<\/p>\n

RBA Governor Michele Bullock also pointed to the equally unyielding AI boom, which is driving up computer chip and storage costs and is adding to a global construction boom.<\/p>\n

Bullock told a Senate committee this week that Australia\u2019s labour market is \u201ca little tighter than we had previously judged\u201d, despite rising unemployment.<\/p>\n

That\u2019s right, the working poor are part of the problem.<\/p>\n

An interesting aside to the soaring inflation rate is that it includes a rapid rise in the price in legitimate tobacco sales from a higher excise, but overlooks the massive decline in real dollars spent on cigarettes as smokers move almost entirely to the black market.<\/p>\n

Related Article\"Illustration<\/a><\/p>\n

It would be comical, if not for the further pressure it puts on non-smoking families via higher inflation, which is prompting higher interest rates.<\/p>\n

What to do?<\/p>\n

Peace in the Middle East would help ease the searing pain for Australian households.<\/p>\n

So would an AI crash that knocks out the soaring cost of expensive tech components \u2013 though it could spark another global financial crisis, with dire consequences for companies, and, ultimately, consumers.<\/p>\n

As far as local concerns go, our productivity needs to do some heavy lifting too, as departing Wesfarmers chairman Mike Chaney points out.<\/p>\n

\u201cOur economy is facing headwinds \u2013 low growth, weak productivity, dismal confidence and limited ambition or capacity for reform,\u201d he outlined in an interview this week.<\/p>\n

Lots of ingredients in this toxic mix. And none of it is going to be fixed at the kitchen table.<\/p>\n

The Market Recap newsletter is a wrap of the day\u2019s trading. Get it each weekday afternoon<\/a>.<\/p>\n

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Close\"ColinColin Kruger<\/a> is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Opinion Colin KrugerSenior business reporter October 29, 2026 \u2014 3:24pm October 29, 2026 \u2014 3:24pm Save You have…\n","protected":false},"author":2,"featured_media":945273,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-945272","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/945272","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=945272"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/945272\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/945273"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=945272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=945272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=945272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}