Lexi Webster
The retail industry is a significant part of Australia's economy, with a total turnover of approximately AUD 329.6 billion in 2019. The industry has witnessed a significant shift towards online shopping, with key players such as ALDI Group, Big W, JB Hi-Fi Ltd, and Kmart Australia Limited actively expanding their operations. The Australian retail market is projected to register a CAGR of 5% during the forecast period of 2024-2029, indicating a positive outlook for the industry. The food retail industry has seen steady growth, with a total turnover of over AUD 168 billion in 2023, while clothing, footwear, and personal accessory retailing accounted for approximately AUD 35.6 billion in the same year.
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What You'll Learn
The retail industry's contribution to Australia's GDP and employment
The retail industry in Australia is a significant contributor to the country's economy, employing over 156,930 businesses and 2,700 smaller businesses in 2024. The industry has experienced growth over the years, with a total retail turnover of approximately AUD 329.6 billion in 2019, a significant increase from the previous year. The Australian retail market is projected to continue growing, with a forecasted compound annual growth rate (CAGR) of 5% between 2024 and 2029.
The retail industry in Australia includes a diverse range of sectors, such as food and beverages, personal and household care, apparel, footwear and accessories, furniture, toys, electronics, and household appliances. The food retail industry has seen steady growth, with a total turnover of over AUD 168 billion in 2023. Clothing, footwear, and personal accessories also contributed significantly to the retail sector, generating approximately AUD 35.6 billion in the same year.
The COVID-19 pandemic brought challenges to the industry, with a decline in sales transactions and a shift from traditional physical retailing to online shopping. However, the organised retail sector has shown resilience and growth, with major players such as ALDI Group, Big W, JB Hi-Fi, and Kmart expanding their operations. Innovations in distribution channels, omnichannel practices, and enhanced payment gateways have contributed to an increasing number of transactions.
The retail industry's contribution to Australia's GDP is substantial, with retail trade statistics often used as early indicators of household consumption. While retail trade has declined as a proportion of total household consumption over time, it still accounted for 33.2% in 2022-23. The industry's resilience and adaptability, along with its diverse range of distribution channels, position the retail sector as a critical driver of economic growth and employment in Australia.
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The impact of the COVID-19 pandemic on the industry
The retail industry is one of the key contributors to Australia's economy, with a total turnover of approximately AUD 329.6 billion in 2019. However, the COVID-19 pandemic significantly impacted the industry in 2020. Lockdown measures and physical distancing norms led to a drop in total sales transactions during the first and second quarters of 2020.
The pandemic accelerated the shift towards online shopping, with a focus on essential sectors such as food and grocery, health and beauty, and electronics. The online distribution channel recorded significant growth during this period, fuelled by the convenience of new omnichannel practices, strong payment gateways, and faster delivery options.
According to Power Retail, 34% of online retailers experienced a 20% or greater decrease in sales due to COVID-19. However, 20% of retailers saw a sales increase of 20% or more, indicating a mixed impact across the industry. The pandemic also disrupted supply chains and logistics, with some retailers struggling to keep up with demand, particularly in the grocery and pharmaceutical sectors.
The Australian retail market is known for its resilience and adaptability. Despite the challenges posed by the pandemic, the industry is projected to grow, with a CAGR of 5% forecasted for 2025-2030. Major companies such as ALDI Group, Big W, JB Hi-Fi Ltd, and Kogan.com Ltd are expected to drive this growth, leveraging innovations in distribution channels and a continued focus on essential sectors.
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Online shopping trends
The Australian retail market is expected to grow at a CAGR of 5% between 2025 and 2030. The market was valued at approximately AUD 329.6 billion in 2019, with a significant shift towards online shopping. This shift was accelerated by the COVID-19 pandemic and various lockdown measures, which encouraged new customers to explore online channels.
The pandemic and subsequent lockdown measures implemented in Australia led to a significant increase in online shopping. In 2020, online shopping became a popular way to combat boredom, resulting in record-high eCommerce traffic. This trend has continued, with more and more Australians integrating eCommerce into their daily lives. In 2024, 17.08 million Australian shoppers used online shopping websites monthly, representing a 45% increase from 2020. This equates to approximately 63.94% of Australia's population.
The rise of eCommerce in Australia has been driven by factors such as convenient and contactless shopping options, as well as the availability of fast delivery services and strong payment gateways. The leading online retailers in Australia include Amazon, Kmart, and eBay.
Australian consumers are also increasingly considering sustainability in their online shopping habits. A KPMG study found that 67% of users are willing to buy from businesses that actively work towards reversing ecological damage. Additionally, three-quarters of consumers have participated in a circular economy by purchasing second-hand or pre-loved clothing.
The next few years are expected to bring a new wave of digital consumption in Australia, with improvements in speed, convenience, and seamless digital experiences.
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Major companies in the Australian retail market
The retail industry in Australia is quite dynamic, with a mix of large and small businesses. It is one of the key contributors to the country's economy, with a total retail turnover of approximately AUD 329.6 billion in 2019, a significant increase from the previous year. The industry is expected to continue growing, with a projected CAGR of 5% during the forecast period of 2025-2030.
Several major companies dominate the Australian retail market, including ALDI Group, Big W, JB Hi-Fi Ltd, Kmart Australia Limited, and Kogan.com Ltd. These companies have a strong presence in the market and offer a wide range of products to consumers.
One of the leading retail companies in Australia is Wesfarmers Limited, which was ranked as the top retail company listed on the Australian Securities Exchange (ASX) in November 2023. Wesfarmers has a diverse range of business divisions, including home improvement, apparel, and general merchandise. They own major retailers such as Bunnings, the Kmart Group, and Officeworks. The company reported a revenue of over AUD 43 billion in the financial year 2023, showcasing its strong performance in the market.
Other notable retailers in Australia include Bunnings Warehouse, Amazon Australia, Woolworths, Coles, and Harvey Norman. These companies have a strong online presence and offer a wide range of products, from home improvement to electronics and groceries.
The Australian retail market has also witnessed a significant shift towards online shopping, with Amazon being the leading online retailer in the country in 2023. This trend is expected to continue, with retailers focusing on strengthening their distribution and digital payment facilities to cater to the changing preferences of consumers.
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Retail trade turnover estimates
The Australian retail industry is a significant contributor to the country's economy. The total retail turnover in 2019 was approximately AUD 329.6 billion, a rise of around AUD 9 billion from the previous year. However, the COVID-19 pandemic caused a decline in sales transactions, with the total retail turnover dropping to AUD 168 billion in 2023. This figure represents a significant recovery from the initial impact of the pandemic, which saw a shift towards online shopping and an emphasis on essential sectors such as food and grocery retailing.
The Australian Bureau of Statistics (ABS) provides monthly and quarterly retail trade turnover estimates for Australian businesses. These estimates are compiled from the monthly Retail Business Survey, which includes approximately 700 large businesses and 2,700 smaller businesses selected through random sampling. The survey focuses on measuring turnover from sole traders and businesses across the retail industry that predominantly sell to households.
The large businesses included in the survey contribute significantly to the total turnover estimate, ensuring a highly reliable Australian total. The ABS's Retail Trade Survey differs from the Household Spending Indicator in scope, as the latter tracks a broader range of consumer spending across all relevant industries, not just retail.
The Australian food retail industry has seen steady growth, with a total turnover of over AUD 168 billion in 2023. Clothing, footwear, and personal accessory retailing contributed approximately AUD 35.6 billion in the same year, while the household goods industry recognised a total turnover of AUD 69.54 billion. Australians spent the most online on homewares, with products for the home accounting for 19.6% of all online spending in 2023.
The Australian retail market is expected to continue growing, with a projected CAGR of 5% during the forecast period from 2024 to 2029. This growth will be driven by key players in the industry, such as ALDI Group, Big W, JB Hi-Fi Ltd, and Kmart Australia Limited, who are actively expanding their operations. The organised retail sector is witnessing substantial growth, with major companies expanding their presence and contributing to the overall market expansion.
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Frequently asked questions
The Australian retail industry is a significant part of the national economy, with a total retail turnover of approximately AUD 329.6 billion in 2019. The industry experienced growth until 2019, but the COVID-19 pandemic caused a decline in sales transactions. However, the market is projected to register a CAGR of 5% during the forecast period of 2024-2029.
The Australian retail market has witnessed a significant shift towards online shopping, with key segments such as food & grocery, clothing & footwear, home, electrical, and health & beauty. The food retail industry has seen steady growth, with a total turnover of over AUD 168 billion in 2023. Clothing, footwear, and personal accessory retailing contributed approximately AUD 35.6 billion in the same year.
The Australian Retail Market is dominated by a few major players, including ALDI Group, Big W, JB Hi-Fi Ltd, Kmart Australia Limited, and Kogan.com Ltd. These companies are actively expanding their operations, indicating a positive outlook for the industry.
