Woolworths, Coles and Bunnings have been revealed as the biggest retailers over the past year as fresh data shows the way shoppers are spending their cash is changing.

An Inside Retail report released this week shows brands focused on the goods households need are increasingly trumping discretionary purchases.

The findings back up data from logistics technology platform Shippit, which found Australian shoppers are spending more on groceries and home furnishings and less on clothes and dining out.

It comes as inflation rises at the fastest pace in two decades, already hitting 6.1 per cent annually. That is placing extra strain on household budgets already feeling the sting of falling real wages.

Despite rising expenses, Australians are still spending up, with Australian Bureau of Statistics data released in late July showing retail spending rose 12 per cent year-on-year as of June.

Queensland University of Technology consumer and retail expert Dr Gary Mortimer said the revenue made by retailers didn’t mean too much, given top spots were taken by companies with a huge number of stores.

But what was significant, he said, was the findings around what shoppers are buying – indicating a shifting mindset brought on by the ongoing worries about the cost-of-living spiral.

The IR rankings show David Jones, a retailer focused on discretionary goods, has seen its moving annual turnover drop by about $140 million.

Harvey Norman, meanwhile, saw its moving annual turnover fall $730 million from its COVID highs.

In contrast, Costo, a retailer focused on everyday goods, saw moving annual turnover soar $300 million as shoppers looked for bargains.

Shippit’s data, taken from about 10 million transactions at 3500 Australian retailers – including Target and Myer – from May 1-July 31, also showed Australians are spending less on dining out, clothing, cosmetics, pharmacy products and entertainment.

But there were a significant jumps in spending at supermarkets and grocery stores, as well as on sports and outdoor activities, computers, electronics and automotive.

Dr Mortimer said while it was concerning that spending on medicines had also dropped, the data appeared to show consumers were starting to spend more on ‘needs’ than ‘wants’.

“Particularly with apparel, clothing, and those discretionary spending categories, there seems to be a shift away to the basics and needs,” he said.

“But it does appear that spending is unabated, despite the fact international borders have reopened and domestic travel is now in play, we’re still moving towards a $400 billion annual retail market.

“Consumers are still spending.”

Inside Retail‘s report found Woolworths and Coles’ growth in revenue came down to a “sharpened focus” on core supermarket operations, including innovation in store formats, store upgrades, enhanced technology, and expanded online shopping platforms.