That record figure is set to grow as arch rivals Woolworths and Coles are widely expected to continue their discounting wars and consumers benefit from lower prices for fresh food.
The two companies revealed this week that their combined annual sales to the end of June reached $63.7 billion, up collectively about 4 per cent.
That figure emerged as the Australian Bureau of Statistics found that prices had fallen for kitchen staples such as fruit, vegetables, cheese, meat and seafood.
There was further good news for consumers, with the annual inflation rate reaching a 13-year low of just 1.2 per cent.
That will provide further impetus for the Reserve Bank to continue reducing interest rates later this year.
Retail sales generally have risen for five consecutive months, powered along by $2 billion in carbon tax compensation payments and four interest cuts since late last year. While electricity costs have soared, petrol prices are falling and the strong dollar has benefited consumer buying power.
Commsec chief economist Craig James said the retail uptick was the strongest five-month period of growth in almost two years but it remains uncertain whether the upward trajectory can be sustained.
"Consumer spending does seem to have lifted, however at present it represents a sharp spike in sales after a long flat or downward trend," Mr James said this week.
"There still remains a lot of uncertainty about what has driven consumer spending higher and whether it can be sustained. As the Reserve Bank Board debated, one possibility was that discounting had increased sales volumes but this meant that the growth in the value of sales had been modest."
The heads of both Woolworths and Coles' parent company, Wesfarmers, attributed much of the sales growth to increased customer numbers taking advantage of price deflation and buying additional products.
The recovery from floods and Cyclone Yasi which struck Queensland last year has also helped lower the price of many fruits and vegetables.
But prices for key goods such as eggs, bread, milk, meat and chicken may come under pressure in the year ahead if Australia suffers flow-on effects from the ferocious drought now gripping the US, the most severe in more than 50 years.
Greg Fraser, an analyst with Fat Prophets, said he expects the competition between the two market leaders to intensify, especially since Coles is mid-way through a successful five-year plan to reinvigorate its business.
He said the marketing of Coles' "down, down" campaign to trim prices had worked well, as had the rewards programs wheeled out by both camps.
Mr Fraser said consumers could expect to see more sweeteners similar to the coupons and petrol vouchers on shopper dockets.
