Australia’s merchandising sector sits at the centre of its retail economy. The industry spans large supermarket chains, speciality stores, and the fast‑expanding online market. Projections from Mordor Intelligence value the retail sector at US $296.05 billion in 2025, with an expectation of reaching US $395.73 billion by 2030.
Growth on this scale highlights the influence of retail on employment, consumer spending, and supply chain development across the country.
Retail spending in Australia has expanded despite economic volatility. The sector’s market size in 2024 was estimated at US $245 billion, with a projected compound annual growth rate of 4.2% through to 2032 according to Verified Market Research. Consumer goods retailing, a significant portion of the wider market, rebounded in 2025 to A$252.7 billion after a 3.2% decline between 2019 and 2024, based on data from IBISWorld.
KPMG’s Australian Retail Outlook 2025 forecasts GDP growth at around 2.1% in the coming year. That level of economic improvement underpins projections of stronger discretionary spending, particularly in categories tied to merchandising such as fashion, electronics, and homewares.
Australia’s online retail presence has accelerated rapidly. Australia Post figures cited by IBISWorld indicate 9.8 million households purchased online in 2024, up from 8.2 million in earlier years. Data from the Australian Bureau of Statistics shows that online sales accounted for 11.9% of total retail turnover in May 2025, compared to 11.4% a year prior. Food purchases represented 6.9% of online sales, while non‑food accounted for 17.9%.
Monthly results reinforce the upward trajectory. In March 2025, seasonally adjusted online retail turnover reached A$4.517 billion, a 13% rise compared with the same month in 2024 (ABS). Broader e‑commerce expenses reached A$63.6 billion in 2024, representing 16.8% of total retail spend, compared to 10% pre‑pandemic.
The competitive dynamic within online retail is also shifting. Marketplaces dominate the space, with Amazon projected to serve 63% of Australian online shoppers and fast‑fashion retailer Shein reaching 26% in 2025. Pure‑play online retailers are forecast to grow at a 10.87% compound rate, supported by expanding payment options such as digital wallets, which are growing at 13.45% annually.
Supermarkets are integrating rapid‑delivery models to meet demand for convenience. Aldi’s trial partnership with DoorDash demonstrates a shift towards capturing a projected 10–12% of supermarket revenue through online channels. Woolworths’ online sales reflect the same trend, rising 15.7% year‑on‑year in the third quarter of FY 2025 to A$2.2 billion.
Retail trade performance through 2025 shows moderate movement. In April, sales dropped 0.1% month‑on‑month, reducing annual growth to 3.8%, just above the country’s population growth rate of about 1.7% (Reuters). Seasonal events still produce short‑term spikes, such as the surge during Black Friday and end‑of‑year promotions. These trends reflect shifting consumer priorities, where price sensitivity and selective discretionary spending are becoming more pronounced.
Retail remains Australia’s second‑largest employer. In February 2025, around 1.332 million people were employed in the sector, according to Jobs and Skills Australia. The figure represents a 0.7% decrease compared to the previous year, despite overall employment levels growing nationally.
Vacancies remain elevated. In March 2025, 329,600 job openings were recorded, roughly double the pre‑pandemic level. The national labour force reached 16.62 million in June, with an unemployment rate of 4.3% and a participation rate of around 67.1% (ABS). Projections from KPMG suggest unemployment may rise to 4.2% by late 2025, with employment growth limited to 1.4%.
Supermarkets and hypermarkets dominate Australia’s merchandising market. They account for approximately 46.85% of total retail revenue, according to Mordor Intelligence. IBISWorld values the supermarket and grocery store sector at A$144.3 billion in 2025, supported by 2,432 operating businesses.
The grocery segment is heavily concentrated. Woolworths and Coles hold a combined market share of around 67%, while Amazon maintains a smaller share of roughly 1% but is expected to expand rapidly due to pricing and logistics advantages. The emergence of online‑only players and discount retailers is adding further pressure to this segment.
Fashion and general merchandise are being reshaped by international entrants, increasing the need to focus on making products stand out on the shelf. Shein’s share of Australian online shoppers sits at 26% in 2025, projected to rise to 28% in the near term (News.com.au). These shifts highlight a broader trend where new digital entrants capture younger audiences, while legacy brands invest in hybrid online‑offline models to defend market share.
Merchandising strategies are adapting to consumer behaviour changes. Artificial intelligence is being used to manage stock levels, forecast demand, and personalise promotions across multiple channels. KPMG’s Australian Retail Outlook 2025 identifies AI and omnichannel approaches as key levers for growth through 2025.
Rapid‑delivery trials by major supermarkets, such as Aldi’s partnership with DoorDash, demonstrate a shift towards convenience‑led merchandising. Similar developments in digital payment methods, such as digital wallets growing at 13.45% annually, support seamless transactions for both in‑store and online shoppers.
Several figures provide a reference point for performance in the current retail climate:
These benchmarks point to a market where digital adoption, hybrid sales models, and consumer‑focused innovation will continue to define competitive advantage.
Retailers must align merchandising strategies with the market’s shift toward integrated channels. Stock management, promotional timing, and pricing strategies need to accommodate both in‑store and online demand patterns. The continued growth of e‑commerce and digital wallets underlines the need to invest in seamless checkout processes and flexible fulfilment models.
Workforce trends also influence strategy. Persistent job vacancies suggest a need for targeted recruitment and upskilling programs to maintain service standards. Market concentration in supermarkets and the rapid growth of fashion marketplaces require ongoing adjustments to product mix and customer engagement to retain market share.
Companies supporting retail fit‑outs play a key role in this shift. Businesses like Mills Shelving, which supply gondola shelving and merchandising accessories, enable retailers to optimise product displays and adapt store layouts to evolving consumer behaviour.
Australia’s merchandising sector has reached a turning point. Market growth remains steady, supported by a combination of traditional retail strengths and rapid digital expansion. Benchmarks such as the projected A$300 billion valuation, the double‑digit growth of online channels, and the dominance of supermarkets provide a clear picture of current performance.
Future growth will depend on how effectively retailers respond to consumer expectations for convenience, personalisation, and value. Merchandisers that adapt quickly to these shifts will be positioned to maintain relevance in an increasingly competitive environment.
