Australian retail sales were unchanged last month, coming in below forecasts even as tax cuts started flowing and supporting household spending power.

The flat July result was below the 0.3 per cent growth consensus forecast and followed 0.5 per cent improvements in both June and May.

Australian Bureau of Statistics head of retail statistics Ben Dorber said mid-year sales boosted activity in those months and July managed to maintain that elevated level.

“The fall in turnover for clothing and footwear retailers and department stores came after higher spending during recent mid-years sales events,” he said.

Clothing, footwear and personal accessory retailing fell 0.5 per cent – the largest decline – followed by department stores, sinking 0.4 per cent.

Cafes, restaurants and takeaway food services fell 0.2 per cent, and household goods retailing and other retailing were both unchanged.

The only industry to record a rise was food retailing, up 0.2 per cent.

Household finances have been supported by tax cuts since July 1 yet private bank transaction data suggests most consumers were so far sitting on income gains rather than spending them.

The Reserve Bank of Australia is tackling persistent price pressures and is looking for weaker spending to help inflation shift back to its two-three per cent target range.

-AAP