As retailers line up to court Australian consumers with Christmas bargains, there are signs the Millennial shopper might be the toughest nut to crack.

Australian consumers facing higher rents and ballooning mortgage costs have had their budgets squeezed by higher costs across the board, from fuel and education to public transport.

That trend is now making retailers nervous. Prams and baby goods seller Baby Bunting’s boss Mark Teperson last week pointed out that the company’s core consumer base – young parents – have started tightening their belts.

“There is a shifting consumer landscape where Millennials account for around 80 per cent of new parents. At the same time, around half of Millennials own a home with a mortgage and a further 40 per cent are renting,” he told the company’s annual general meeting.

“With fixed term mortgages written in the last few years now rolling off into variable loan rates, this group is experiencing higher housing costs.”

Baby Bunting has previously noted consumers trading down their spending on big-ticket items such as car seats and prams, and the company revealed in a trading update on Tuesday that its sales are down by 3.3 per cent in the year-to-date to October 8.

The infant goods store is not the only retailer that has pointed to the impact that rising housing costs in particular have had on Millennial and Generation Z consumers, reducing the cash they have available to spend.

“Specifically for [the] youth customer cohort, rising costs in rent and student loan debt which is linked to CPI compounded the more broadly experienced general cost of living rises, such as food, petrol and utilities,” the chief executive of youth retailer Universal Store, Alice Barbery, told investors when the company unveiled its full-year financial results earlier this year.