Challenges mount for retailers: Deloitte

The challenges for retailers are mounting, not least from the eventual wash-up from the election campaign.

That's according to Deloitte Access Economics which also warns in its quarterly retail forecast report that the one-off boosts to consumers from the recent interest rate cut, the wealth boom from housing and the drop in petrol prices are likely to fade.

"The difficulty now facing retailers is that many of those supports are temporary ... meanwhile, the challenges to income growth are continuing with wage growth remaining at record lows," Deloitte partner David Rumbens says.

The report also saw the May 3 budget as a "relatively quiet affair" with not much done in terms of budget repair.

Key measures that would impact on future spending were further annual tax hikes to tobacco excise, changes to superannuation arrangements and a modest increase in the threshold of the second income tax bracket from $80,000 to $87,000 to tackle bracket creep.

"However, the federal budget confirmed a large deficit, and the risk of further belt tightening following the federal election - involving either higher taxes or reduced welfare payments - is very real," the report says.

Mr Rumbens expects inflation-adjusted retail sales growth to have slowed to 2.5 per cent in 2015/16 and to 1.9 per cent in 2016/17 after a strong 3.3 per cent rate in 2014/15.