Retail spending bounced back to grow by 0.5 per cent in July, data released on Monday by the Australian Bureau of Statistics showed, eclipsing market expectations for turnover to rise by a more muted 0.2 per cent increase.

The increase represents a strong turnaround from June, when retail spending collapsed by 0.8 per cent.

ABS head of retail statistics Ben Dorber said the bigger than expected rise in retail spending was due to shoppers making up for the weaker-than-usual end of financial year sales period.

Spending across most categories increased with shoppers choosing to spend more on hospitality services rather than at the supermarket checkout.

“Cafes, restaurants and takeaway food services turnover grew considerably, despite an overall slowing down in food-related spending in recent months,” Mr Dorber said.

“The rise in July was boosted by additional spending at catering and takeaway food outlets linked to the 2023 FIFA Women’s World Cup and school holidays.”

Retail turnover in department stores, and for clothing, footwear and other accessories also grew.

Sales in household appliances recorded the only decline in turnover, falling 0.2 per cent.