Shifting Spend: Who Wins and Who Loses in Australian Retail
Australian Retail Sector Insights Report – FY25e
Executive Summary & Introductory Commentary
Australia’s retail sector enters FY25 on a cautiously optimistic note, buoyed by an expected 3.5% year-on-year sales increase and a projected GDP growth of 2.1%. These gains are underpinned by easing inflationary pressures, stabilising interest rates, and an uptick in consumer sentiment. Retail continues to be a cornerstone of the Australian economy, contributing roughly 18% of GDP and employing over 1.4 million Australians.
While consumer wallets remain sensitive in a post-inflation environment, value-led and experience-rich propositions are proving to be decisive growth levers. Retailers able to integrate compelling product mixes with sharp pricing strategies, supported by mature digital channels, are outpacing the market.
Loyalty programs have emerged as a critical engagement tool over 86% of Australians are members of at least one, and the market is forecast to grow at 13% CAGR, reaching US$1.96 billion by 2029. E-commerce penetration continues to deepen, with non-food online categories leading the charge. This is not just a story of digital success retailers excelling in physical engagement, even as online channels grow, are finding that a true omni-channel approach delivers disproportionate customer stickiness.
Top 3 Performers (FY25e):
- Dusk – outperforming with a home-luxury meets affordability play.
- BCF – capitalising on the outdoor leisure boom.
- The Good Guys – strong appliance and electronics demand driven by promotions and omni-channel execution.
Bottom 3 Performers:
- Big W – challenged by online competition and weak discretionary spend.
- Shaver Shop – stagnant growth amid margin pressure.
- Supercheap Auto – modest growth, constrained by category-specific headwinds.
Here’s how some of the biggest players in the market performing, within their sectors.
Retailer Performance Driver Chain – From Offer to Outcome
| Retailer | Product Mix | Pricing Strategy | Digital Maturity | Consumer Sentiment Driver | Result |
| Dusk | Home fragrance, décor, gifting items | Premium-but-affordable, high-margin | Strong e-commerce with low delivery cost | Nesting, small luxuries, gifting trends | Top growth both online & in-store |
| BCF | Outdoor, leisure, camping, fishing | Mid-to-premium, seasonal discounts | Research-friendly site, omni-channel | Domestic travel & outdoor experience boom | High growth – both channels |
| The Good Guys | Appliances & electronics | Aggressive promos, bundle deals | Inventory visibility, click-and-collect | Value-driven tech replacement | Balanced strong growth |
| JB Hi-Fi | Electronics & home entertainment | Everyday low, price-match | Excellent omni-channel integration | Gaming and tech demand ongoing | Strong across channels |
| Rebel | Sports equipment & apparel | Competitive, clearance pricing | Solid site + loyalty integration | Athleisure & fitness momentum | Steady in-store & online growth |
| Coles | Grocery & essentials | Value focus, private labels | Robust online delivery infrastructure | Convenience under pressure, cost-of-living | Steady in-store, modest online |
| Woolworths | Grocery & fresh produce | Value + premium mix | Large-scale online fulfilment | Quality and convenience | Like Coles, premium skew |
| Bunnings | DIY, gardening, hardware | Everyday low pricing | Online growing, logistical limits | Home improvement focus | In-store-led growth |
| Accent Group | Footwear & apparel | Trend-driven promos | Good digital marketing, fast fulfilment | Fashion trends & influencer impact | Modest balanced growth |
| Kmart | Discount general merchandise | Ultra-value pricing | Basic online, improving app traction | Budget-sensitive shoppers | Modest in-store growth |
| Supercheap Auto | Auto accessories & tools | Loyalty, regular promos | Research tools, click-and-collect | Maintenance as cost-saving | Modest growth both channels |
| Shaver Shop | Grooming appliances | Competitive but low margin | Undifferentiated online | Price-conscious shifting to marketplaces | Flat to slight decline |
| Big W | Low-margin general merchandise | Everyday low pricing | Weak online proposition | Drop in discretionary spend, online competition | Negative growth |
Market Implications & Strategic Outlook
- E-Commerce & Loyalty Are Key Differentiators
Shoppers increasingly seek not only low prices, but also value over time. Loyalty programs deliver recurring benefits, from discounts to exclusive offers, that strengthen emotional connections and drive repeat purchases. The ability to link these programs across online and in-store channels is a hallmark of the most successful retailers. - The Art of Selling Still Matters
Convenience, speed, and digital integration are now non-negotiables, but skilled human engagement remains critical. In-store teams that offer personalised recommendations, handle complex queries, and create memorable interactions still influence conversion rates and lifetime value. - True Omni-Channel Requires Seamless Integration
Leading retailers unify stock visibility, pricing, promotions, and loyalty across all touchpoints. This convergence enables customers to begin their journey online, complete it in-store (or vice versa), without friction. Marketing, service, and fulfilment must align to create a consistent and satisfying brand experience. - Generational Shift Requires Agility
As Boomers gradually cede spending power to Millennials and Gen Z, expectations are shifting towards speed, sustainability, personalisation, and authenticity. Retailers need to evolve product strategies, messaging, and operational models to resonate with these emerging dominant cohorts who are digital natives but still value tangible in-store experiences.
Closing Commentary
Consumer sentiment is inherently tied to perceived value, and this extends beyond price into the realm of benefits, convenience, and brand affinity. Loyalty programs are more than just points; they are a mechanism for retailers to prove to customers that their patronage matters. In 2025, value is not solely about discounts it’s about the opportunity to gain more from every transaction.
Equally, convenience and the art of selling remain central to competitive advantage. While AI-driven recommendations, same-day delivery, and self-checkout kiosks are transforming the landscape, the skill of a well-trained salesperson someone who can read a customer’s needs, inspire confidence, and guide decisions remains irreplaceable.
Omni-channel retailing is no longer optional; it’s the baseline for relevance. But “total retail” goes beyond channel integration it demands that marketing, product, service, fulfilment, and after-sales support are all aligned to deliver seamless value. For the next generation of shoppers, this cohesion will define the difference between a transaction and a relationship.
As the demographic shift accelerates and Boomers’ share of spend declines, the baton passes to younger generations whose loyalty must be earned differently. They expect faster service, personalised offers, ethical sourcing, and transparent communication. Retailers who adapt now by weaving together value, convenience, human engagement, and omni-channel excellence will be the ones still leading when today’s disruptors face disruption themselves.
Sustainable success in retail demands more than operational excellence, it requires leadership clarity, agility, and foresight. I invite you to connect with me to discuss how these dynamics are reshaping Australia’s retail sector and what they mean for the leaders steering it forward.
Peter Sinodinos
Partner, Consumer, Retail and Life Sciences