Australia Retail Market Size, Share Analysis and Forecast Report (2024-2032)

Australia Retail Market Trends

The Australia retail market thrives due to the country's robust economy, which enhances consumer confidence and draws in investors. High disposable income increases demand for diverse retail products. Advanced infrastructure enhances supply chain efficiency, while the multicultural population enables retailers to address diverse preferences, creating unique opportunities for tailored offerings and further driving growth in the Australia retail market. The International Trade Administration reports that total retail spending in Australia reached US$242 billion in 2022, marking a 9.2% increase from 2021.

The growth of e-commerce is broadening retail opportunities, enabling businesses to connect with larger audiences and increase sales. Innovative approaches improve customer experiences and operational efficiency. Supportive government policies encourage entrepreneurship, and the rising demand for sustainable products drives eco-friendly practices, enhancing brand loyalty among environmentally conscious consumers. The Australian Bureau of Statistics (ABS) reported that in the 2020-21 period, the e-commerce retail sector contributed 41.5% to the increase in the value added by digital activities, fueling demand of the Australia retail market.

Australia Retail Market Growth

The Australia retail market is growing thanks to technological advancements like AI and data analytics, which enhance operational efficiency and customer engagement. Supportive government policies foster entrepreneurship, creating a favourable environment for retail growth. Additionally, the country’s diverse population allows retailers to customise their offerings, increasing retail demand growth. In September 2024, Umall, Australia’s leading online Asian grocery platform, marked a milestone by becoming the first online grocery retailer to adopt AI-powered robotic sorting technology. This advanced system efficiently processes thousands of products per hour, effectively managing over 20,000 SKUs, including fresh produce and speciality items.

Consumer demand for sustainable products encourages retailers to embrace eco-friendly practices, which strengthens brand loyalty and contributes to growth in the Australian retail market. Enhanced logistics and transportation improve supply chain efficiency, lowering costs and ensuring timely deliveries. Additionally, shifting shopping habits towards convenience and experiences drive retailers to innovate, opening new growth opportunities in the Australia retail market. The National Retail Association advocates for consistent legislation that promotes environmental sustainability while minimizing negative impacts on businesses and consumers. Many retailers are enhancing their environmental efforts by offering sustainable alternatives and recycling initiatives. The Association also emphasizes industry-wide education and collaborative efforts to achieve improved environmental outcomes.

Australia Retail Market Insights

• The ABS predicts that Australia’s e-commerce market will reach US$37.10 billion by 2024, with an expected annual growth rate of 9.36% from 2024 to 2029.
• According to the ABS, retail trade in Australia increased by 2.3% from July 2023 to July 2024, totalling USD 36,160.1 million in July 2024.
• Industry reports show that total online retail sales reached USD 4,221.7 million in July 2024, compared to July 2023. Year-over-year seasonally adjusted sales rose by 15.9% (USD 579.0 million).

Industry News

July 2024

Molton Brown entered the Australian travel retail market in partnership with Lotte Duty-Free, marking its debut in the downtown duty-free sector. The launch featured popular fragrances like Re-Charge Black Pepper and Coastal Cypress & Sea Fennel, alongside new favourites, offering a full range of bath, body, and home collections.

May 2024

Gander, a global retail technology firm specialising in food waste prevention, announced a significant milestone in its efforts to promote sustainability in Australia’s grocery retail industry. The Gander platform provided retailers with a real-time mobile solution to showcase markdowns, helping shoppers save money while reducing food waste in their communities.

Australia Retail Market Drivers

Sustainability Focus

In the Australia retail market, sustainability has emerged as a major priority as consumers increasingly pursue eco-friendly products and ethical practices. Retailers are responding by embracing sustainable sourcing, reducing waste, and utilizing environmentally friendly packaging. Initiatives such as in-store recycling and supply chain transparency are becoming more popular. This trend extends beyond mere compliance; it is driven by consumer demand for brands that align with their values. As awareness of environmental issues grows, retailers that focus on sustainability can enhance brand loyalty, attract environmentally conscious customers, and differentiate themselves in a competitive market, fostering growth in the Australia retail industry. For instance, IKEA Australia opened its first store designed to generate more renewable energy than it consumes by installing solar panels on the roof and parking areas. This initiative, part of Ingka Group's commitment to becoming climate-positive by 2030, aimed for 100% renewable energy by 2025 and involved collaboration with Planet Ark Power, the South Australian Government, and other partners.

Technological Advancements

The Australia retail market is experiencing growth driven by technological advancements, with innovations like AI, data analytics, and automation enhancing operational efficiency and customer engagement. Retailers are using these technologies to create personalized shopping experiences, optimize inventory management, and enhance supply chain logistics. For example, AI tools analyze consumer behaviour to enable targeted marketing. Various trends in the Australia retail market are gaining momentum, with automation in warehousing and logistics enhancing fulfilment speed and accuracy. In 2022, Kmart Australia aimed to become a digitally enabled, customer-focused retailer, requiring substantial investment. They collaborated with Infosys to move to the cloud using Infosys Cobalt Cloud Services, which reduced costs and improved scalability. Furthermore, they applied the Infosys A.R.T framework and Modernization Suite to upgrade their mainframe, reinforcing the benefits of the cloud and setting a solid foundation for future growth.

Opportunities in the Australia Retail Market

Changing Consumer Preferences

The Australia retail market is thriving as consumers increasingly value convenience, experience, and personalization in their shopping habits. There is a growing demand for seamless multi-channel shopping experiences, with many expecting integrations between online and offline platforms. Additionally, shoppers are drawn to products that align with their lifestyles, fueling interest in niche and speciality items. Brands that offer customized experiences, including personalized recommendations and curated collections, are more likely to capture consumer interest, thereby positively supporting the Australia retail market revenue. In October 2023, Australian retailer Rebel introduced an updated loyalty program with revised reward structures, allowing members to earn points at a rate of 100 points for USD 5 and redeem any amount without a minimum requirement. The program also featured discounted pricing, exclusive experiences, and early access to promotions.

Market Restraints

The Australia retail market faces several key restraints. Economic uncertainty, including inflation and shifting consumer spending, impacts profitability. Stringent regulations around product safety and sustainability increase compliance costs. Intense competition from domestic and international players pressures prices, while global supply chain disruptions lead to inventory shortages.

Changing consumer preferences towards sustainability requires quick adaptations and labour shortages hinder operational efficiency. Additionally, continuous technological investment can strain resources for smaller retailers. Market saturation in certain sectors results in diminishing returns, and growing environmental concerns push retailers to adopt sustainable practices, necessitating strategic planning to navigate these challenges.

Australia Retail Industry Segmentation

“Australia Retail Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Products

• Food, Beverage, and Grocery
• Personal and Household Care
• Apparel, Footwear, and Accessories
• Furniture and Home Décor
• Electronic and Household Appliances
• Others

Market Breakup by Distribution Channel

• Supermarkets and Hypermarkets
• Convenience Stores
• Specialty Stores
• Online
• Others

 Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Retail Market Share

By Products Analysis

The Australia retail market is experiencing growth as the food, beverage, and grocery sectors enjoy steady demand, providing retailers with reliable revenue streams. The country's multicultural population fosters diverse food preferences, allowing retailers to meet various tastes. A rising interest in health and wellness boosts demand for organic and locally sourced products. E-commerce growth enhances convenience, while sustainability initiatives attract eco-conscious consumers, reinforcing brand loyalty and driving Australia retail industry revenue. In May 2024, Japanese retailer Muji launched its curry range in Australian stores for the first time, celebrating the 15th anniversary of its Butter Chicken curry. They announced plans to introduce popular food items, starting with a small selection of snacks, including two flavours from their wafers, crackers, and crepe rolls, along with five curry varieties.

The Australia retail market is strengthened as the personal and household care sectors provide essential products that ensure consistent demand, regardless of economic changes. Strong brand loyalty fosters repeat purchases and customer retention. Innovation opportunities, such as new formulations and eco-friendly choices, engage consumers. Increased hygiene awareness drives retail demand, while cross-promotion with grocery items enhances shopping experiences and boosts sales. In September 2024, Gen-Z skincare brand Bubble launched in Australia, entering brick-and-mortar stores via the Priceline drugstore chain. The products emphasize advanced plant-based science, affordability, effectiveness, ease of use, and community inspiration, while being vegan and cruelty-free, certified by Leaping Bunny.

Australia Retail Market Regional Insights

The Australia retail market is thriving, with New South Wales (NSW) leading as the largest market that merges luxury retail with e-commerce and sustainability initiatives. Victoria (VIC) highlights fashion and local goods, while Queensland (QLD) benefits from tourism-related seasonal demand and eco-friendly trends. Western Australia (WA) offers a mix of premium products, emphasizing convenience and sustainability, further contributing to the growth of the Australia retail industry.

According to ABS data, retail trade growth from July 2023 to July 2024 was positive in several states, including Victoria (0.1%), Queensland (0.2%), Western Australia (0.2%), and Tasmania (0.5%), with Tasmania showing the largest increase. These gains may be attributed to consumer confidence, favourable economic conditions, or local spending trends.

Competitive Landscape

Key players in Australia retail market offer a diverse array of products, such as fashion, homewares, cosmetics, and electronics, ensuring a well-rounded shopping experience. These companies prioritise customer service and innovation, regularly refreshing their product lines to keep pace with the latest trends. They also maintain a robust online presence alongside numerous brick-and-mortar locations.

Key Industry Players

Aldi Group: Established in 1913 and headquartered in Essen, Germany, it is a global discount supermarket chain known for its efficient, no-frills shopping experience. By specializing in high-quality private-label products, Aldi has revolutionized grocery retail in various countries, prioritizing customer satisfaction while maintaining a strong focus on operational efficiency.

Woolworths Group Limited: Founded in 1924 and based in Bella Vista, Australia, Woolworths is a leading supermarket chain recognized for its fresh produce and commitment to sustainability. Offering various shopping formats, including online services, Woolworths emphasizes exceptional customer service and community engagement, reinforcing its reputation as a trusted retail brand in Australia.

JB Hi-Fi Limited: Established in 1974 and headquartered in Melbourne, Australia, it is a prominent electronics and entertainment retailer serving Australia and New Zealand. Known for its extensive selection of consumer electronics, software, and appliances, JB Hi-Fi combines competitive pricing with an engaging shopping experience, supported by knowledgeable staff and frequent promotions.

Kmart Australia Limited: Founded in 1969 and based in Melbourne, Australia, Kmart is a well-known discount department store chain offering a wide array of affordable products, from home goods to clothing. With a focus on delivering value and trendy merchandise, Kmart continually adapts its product range to meet evolving consumer demands.

Other key players in the Australia retail market report include Kogan.com, Amazon.com, Inc., Coles Group, eComm Store Pty Ltd. and Myer Pty Ltd. among others.

Recent Development

September 2024

Bunnings opened new stores in Wonthaggi (VIC) and Noarlunga (SA). The company also expanded four existing locations, including North Penrith and Lismore (NSW), Coburg (VIC), and Claremont (WA). Oxley (QLD) was set to receive a completely rebuilt store, with plans for Frenchs Forest (NSW) and Portland (VIC).

September 2024

Global lifestyle brand Miniso opened its first Sanrio-themed store on George Street, Sydney, Australia. This marked Miniso’s first flagship store in the country and the first dedicated to Sanrio intellectual property. The 300m² store featured 2,500 stock-keeping units (SKUs) and highlighted the brand’s IP strategy with themed zones.