Lexi Webster
Australia's retail industry is a significant contributor to the country's economy, accounting for approximately $430 billion in revenue and providing employment to over 1.4 million people. The industry comprises almost 140,000 retail businesses, including both physical shop fronts and online stores, and makes up about 4.1% of the nation's GDP. While the retail sector has faced challenges due to the rise of online retailing and competition from global retailers, it remains a dynamic and diverse part of the Australian economy, constantly adapting to new trends and technologies to enhance the customer experience.
| Characteristics | Values |
|---|---|
| Retail Trade Survey Focus | Measuring turnover from sole traders and businesses that sell predominantly to households |
| Retail Trade Survey Composition | 700 'large' businesses and 2,700 'smaller' businesses |
| Major Players in the Australian Retail Market | ALDI Group, Big W, JB Hi-Fi Ltd, Kmart Australia Limited, Kogan.com Ltd, Wesfarmers |
| Australian Retail Market CAGR | 5% during the forecast period (2025-2030) |
| Total Retail Turnover in 2019 | AUD 329.6 billion |
| Food Retail Turnover in 2023 | AUD 168 billion |
| Clothing, Footwear, and Personal Accessories Retail Turnover in 2023 | AUD 35.6 billion |
| Household Goods Industry Turnover in 2023 | AUD 69.54 billion |
| Leading Online Retailer in Australia as of July 2023 | Amazon, followed by Kmart and eBay |
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What You'll Learn
Retail industry's contribution to GDP and employment
The Australian retail industry is a significant contributor to the country's economy, accounting for an estimated $430 billion in annual sales and representing 4.1% of the nation's GDP. The industry comprises almost 140,000 retail businesses, including over 120,000 retail shop fronts and online stores.
Retail Trade is the second-largest employing industry in Australia, with around 9.2% of workers having their main job in this sector. This equates to more than 1.4 million people employed in retail, making it the largest private sector employer in the country and accounting for 10.7% of total employment. The largest employing occupation within the retail industry is sales assistants (general).
The retail industry in Australia is diverse, encompassing a range of business sizes, regions, retail formats, and types of goods sold. The industry has been facing challenges due to the rise of online retailing, with an estimated 6% of total retail sales occurring online. This shift towards online shopping has resulted in increased competition from global retailers, impacting the productivity of domestic retailers.
While retail sales growth has trended downwards over the past five years due to consumers saving more and spending on non-retail services, the industry remains a cornerstone of the Australian economy. Retail trade statistics are often used as early indicators of household consumption patterns, providing valuable insights into consumer behaviour and preferences.
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Online retailing's share of total sales
The retail industry in Australia accounts for 4.1% of GDP and 10.7% of employment, with almost 140,000 retail businesses operating in the country. Retail sales growth has been trending downwards over the past five years as consumers save more and direct their spending towards non-retail services.
Online retailing currently represents around 6% of total Australian retail sales, comprising 4% domestic ($8.4 billion) and 2% from overseas retailers ($4.2 billion). This figure is expected to grow, as it has in other comparable countries.
The impact of online retailing is also evident in the decline of retail trade as a proportion of total household consumption. In the 1959-60 period, retail trade accounted for 56.2% of household consumption, but this had fallen to 33.2% in 2022-23.
Online sales as a proportion of total retail sales have been steadily increasing. In March 2025, online sales as a proportion of total retail sales rose from 10.5% in March 2024 to 11.6%. This was an increase of 11.9% ($448.4 million) in original online sales compared to the previous month.
The rise of online retailing has been a significant competitive challenge for the Australian retail industry, intensifying competition and providing greater convenience for consumers.
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Retail trade turnover estimates
The Australian retail industry is worth $430 billion and employs more than 1.4 million people, accounting for 4.1% of GDP and 10.7% of employment. Retail trade businesses are primarily involved in the purchase and resale of goods to the general public, usually from shop fronts, but increasingly online.
Retail trade statistics are often used as an early indicator of household consumption. The Retail Trade Survey focuses on measuring turnover from sole traders and businesses across the retail industry that predominantly sell to households. The Household Spending Indicator, on the other hand, tracks a broader range of consumer spending across all relevant industries, not just retail.
The Australian Bureau of Statistics (ABS) intends to cease the Retail Business Survey and Retail Trade Publication to reduce the burden surveys place on businesses and instead focus on producing timely statistics using new data sources. The last release of the Retail Trade Publication will be on 31 July 2025, referencing the June 2025 period.
Monthly turnover estimates in Retail Trade, Australia are compiled from the monthly Retail Business Survey, which includes about 700 large businesses and 2,700 smaller businesses selected by random sample. The large businesses contribute approximately 69% of the total estimate, ensuring a highly reliable Australian total turnover estimate.
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Retailers' adaptability to technology
The Australian retail industry is vast, with almost 140,000 retail businesses, accounting for 4.1% of GDP and 10.7% of employment. Retail sales growth has slowed over the past five years as consumers save more and spend more on services. The industry has faced competitive challenges, including the rise of online retailing, which currently accounts for 6% of total sales, and the entry of innovative global retailers. To adapt and remain competitive, Australian retailers are embracing technology and innovation.
Many retailers are integrating digital technologies into their operations, recognising the need to adapt quickly to global trends like AI, the metaverse, and blockchain. They are investing in ecommerce systems to drive operational efficiencies and improve customer engagement and experience. For example, Petstock Group reduced their customer checkout process from three steps to two, resulting in faster transaction speeds and improved customer satisfaction. Most retailers are also embracing or planning to embrace generative AI to enhance the customer experience and brand loyalty.
Retailers are also prioritising investments in business intelligence and supply chain optimisation to increase efficiency and reduce costs. They are leveraging data and digital experiences to drive business evolution and revenue growth. For instance, 58% of retailers plan to increase investment in ecommerce systems in the next year. However, implementing digital technologies requires significant upfront investment, so retailers must carefully evaluate the potential return on investment and ensure the benefits outweigh the costs.
To succeed in a competitive market, retailers are adopting innovative strategies to improve customer engagement and find new revenue streams. They are investing in technology to bring better customer engagement, increase efficiency, and identify new revenue streams. This includes omnichannel adaptability, with Australian shoppers being channel agnostic, and the use of social commerce to reach customers where they are, such as on social media channels. Retailers are also investing in supply chain efficiencies, cybersecurity, and customer experience design.
Overall, Australian retailers are adapting to technology by integrating digital solutions, optimising operations, and leveraging data and supply chains to enhance the customer experience and drive business growth. By embracing innovation and prioritising ongoing training, they aim to stay competitive in a rapidly changing industry.
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Retailers' sustainability commitments
The Australian retail industry is vast, with almost 140,000 retail businesses, accounting for 4.1% of GDP and 10.7% of employment. The industry is facing challenges, with retail sales growth trending downwards over the last five years as consumers are saving more and spending more on services. Online retailing also poses a significant challenge, with Australia lagging behind other countries in this sector.
Many retailers are meeting or exceeding regulatory obligations and understanding the value of a stronger focus on ESG (Environmental, Social, and Governance). They are attracting green finance and integrating sustainability goals into their business strategies. These retailers have identified priority ESG areas and set targets such as zero net emissions, diverse workforces, responsible sourcing, and circular innovation.
Some retailers are leading the way as ESG standouts, including disruptors and innovators. For example, Zero Co delivers environmentally friendly cleaning products in reusable and refillable containers made from recycled beach and ocean waste. Existing retailers are also making changes, with some planning net-zero emissions by 2050, following the commitment made by Britain's biggest retailer, Tesco.
The National Retail Association (NRA) is also actively involved in sustainability initiatives, partnering with other organizations to improve environmental policies and develop resources for retailers. They support the phasing out of single-use plastics and work with retailers to implement sustainable practices.
Overall, the Australian retail industry is vast and facing challenges, but retailers are increasingly committed to sustainability, driven by consumer expectations and the potential for green finance.
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Frequently asked questions
The retail industry accounts for 4.1% of Australia's GDP.
The retail industry employs 10.7% of Australia's workforce, which is around 1.4 million people. It is the second-largest employing industry in the country.
Australia's retail sector is valued at $430 billion.
