Bunnings, JB Hi-Fi flag weaker sales as consumers tighten purse strings

• Some of Australia’s biggest retailers warn that high inflation and interest rates are weighing on household spending.
• Many, such as Wesfarmers, JB Hi-Fi and Super Retail, are anticipating a large Black Friday spend to make up for lagging sales.
• As the cost of living increases, Australian households may concentrate their spending around major sales events.

Some of the country’s biggest retailers say sales are expected to flatten as consumers tighten their belts or wait for major sales like Black Friday.

JB Hi-Fi reported this morning that comparable store sales fell 1.4 per cent in Australia in its first quarter of 2026/27, down from the same period a year ago.

“The group continues to see variability in trading and heightened competitive activity, with customers remaining focused on value and increasingly shopping during promotional events,” the board said in a trading update.

“In October, the Group has seen sales slow ahead of the important Black Friday and Christmas trading periods.

“As always, the Group will continue to focus on driving demand and growing market share through creating great value offers for its customers and delivering exceptional customer service.”

A similar story was being reported at Super Retail, owner of household brands such as Supercheap Auto, BCF and Rebel.

“Group like-for-like growth moderated during the period as industry-wide headwinds weighed on consumer confidence and discretionary spending,” Super Retail’s Group Managing Director and Chief Executive Officer Paul Bradshaw said.

“Supercheap Auto and Rebel remained resilient, with both brands growing market share.

“Higher fuel prices weighed particularly on BCF. Year-on-year promotional cycles and milder winter conditions affected Macpac.”

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Wesfarmers, which owns major household brands such as Bunnings and Kmart, said sales were holding up, but considerable headwinds were weighing on the company as households faced several factors squeezing discretionary spending.

In an address to the company’s AGM, Wesfarmers Managing Director Rob Scott said the Bunnings Group had seen lower sales in “recent weeks” as a number of variables weighed on household budgets.

“Over the past year, Australian households and businesses faced persistent cost pressures with elevated inflation and rising interest rates,” he will tell investors at the AGM later today.

“The Middle East conflict added to domestic cost pressures, with supply-side challenges in fuel, fertilisers and international shipping.

“Together, these pressures weighed on sentiment and the economy.”

Scott said Kmart Group’s sales were broadly in line with expectations because of the overarching strategy of not relying on sales to boost the bottom line.

“During this time, our businesses have continued to provide value to customers, including by lowering the prices of thousands of products,” he said.

“With our everyday low price model in Bunnings and Kmart, customers know they’ll get great value all the time, not just during promotions.”

High inflation to concentrate household spending around sales

With financial markets now pricing in an 82 per cent chance of an interest rate hike next week, and inflation remaining high, economists expect consumers to concentrate their traditionally high Christmas spending around sales events such as Black Friday.

“The climate of higher costs means the strained margins are likely to remain a defining feature as businesses move towards Black Friday and Christmas,” says Australian Retail Council Chief Economist Glenn Fahey.

“November and December are typically make-or-break periods for a lot of retailers, and the key question now is whether households can maintain that level of spending as higher borrowing costs begin to bite.”

Research from e-commerce platform Shopify shows Australians plan to spend an average of $346 over the Black Friday and Cyber Monday sales period, up 6.8 per cent from $324 last year.

Black Friday this year falls on November 27, with sales programs and marketing programs to begin as early as next week.