Inflation and rate hikes have stopped Aussies' spending, leaving the country in the midst of a "retail recession", according to a report from Deloitte Access Economics.

Real retail turnover fell 0.6 per cent in the March quarter, bringing a second decline since the 0.3 per cent fall in the December quarter.

"This retail recession isn't a surprise," said David Rumbens, lead author of the Deloitte report.

"High inflation and rising interest rates have eroded the purchasing power of consumers and, in response, consumer sentiment is now at historically pessimistic levels."

And it's not just retail that's expected to take a hit.

"We're also expecting consumer caution to extend further than just goods, with consumers expected to also pull back on services, which could result in a broader-based 'consumer recession' later this year."

With around 400,000 migrants expected to land in Australia in 2022/23 and 315,000 in 2023/24, Deloitte economists are, however, expecting retail turnover to lift from a 0.7 per cent decline across the 2023 calendar year to 1.3 per cent growth in 2024.