Australian Retailers Face Reckoning Amid Growing Online Competition
Australian Retailers Face Reckoning Amid Growing Online Competition
2
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Brick-and-mortar retailers in Australia are under mounting pressure as market dynamics shift dramatically.
According to the latest data from the Australian Securities and Investments Commission (ASIC), a staggering 768 retailers declared insolvency in the 2023-24 financial year. This marks a significant increase from 540 in 2022-23 and 319 in 2021-22.
The economic environment is also adding to the woes. Consumer sentiment continues to hover at recessionary levels, exacerbating the struggles for traditional retailers.
The Australian Bureau of Statistics (ABS) recently disclosed a worrying trend in retail sales. Quarterly retail sales have contracted by 0.3%, and are down 0.6% compared to last year. Remarkably, this marks the fifth consecutive quarter with a negative annual growth rate outside of pandemic disruptions, a rarity since the 1980s.
On a per capita basis, retail volumes saw a drop of 0.9%, the eighth consecutive quarterly decline, representing a 3.0% year-on-year decrease. This spells further trouble for conventional retail outlets grappling with diminishing foot traffic.
Competition from online retailers like Amazon and eBay is intensifying the challenges for brick-and-mortar stores. Offering unparalleled convenience and competitive pricing, these e-commerce giants are capturing an increasingly larger slice of the market.
Amazon’s strengthened foothold in Australia since its arrival in December 2017 poses a substantial threat. With the promise of low prices and the allure of complimentary 48-hour deliveries for Amazon Prime members, Amazon has continued to expand its reach. Earlier this year, the company announced plans to further grow its operations and distribution network in Australia.
A recent Roy Morgan study, reported by The New Daily, reveals a compelling trend: Amazon expanded its customer base by 16% in the year ending June 2024, attracting 1.1 million additional users compared to the previous year.
Brian Walker, CEO of Retail Doctor Group, posits that Amazon is on track to become one of Australia's largest variety retailers, alongside the likes of Kmart and Big W. "Amazon could become Australia’s largest general merchandise retailer within the next five years," Walker noted.
Walker underscores the necessity for existing retailers to revamp their competitive strategies. "You're under significant threat if you don’t offer advantages in speed, range, price, or convenience," he added.
Signs of this competitive stress are already visible, with retailers like Booktopia closing their doors in the face of relentless pressure.
Amazon’s Prime program benefits customers with rapid, free delivery for a modest annual subscription fee, encouraging ongoing use of Amazon’s services. Prime members also gain access to Amazon’s entertainment offerings, forming a package that rivals Netflix.
From Amazon's perspective, the Prime subscription provides a steady revenue flow and ensures loyal customer engagement, making further investments in fulfillment centers more economically viable.
While Amazon and Walmart dominate the American retail scene, the forecast suggests Amazon is on a path to significant dominance in Australia as well. The financial landscape is challenging for traditional retailers that must now focus on value and convenience to retain customer loyalty.
Published:Sunday, 4th Aug 2024 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
ANZ Banking Group has reported an 11% increase in profit for its Australia Commercial division over the past year. This growth is attributed to robust lending activities, particularly in the agribusiness and health sectors. - read more
The Australian Prudential Regulation Authority (APRA) has announced a significant policy change aimed at mitigating risks in the housing market. Effective February 2026, APRA will impose a cap on high debt-to-income (DTI) home loans, limiting such loans to 20% of new home lending. This measure applies to both owner-occupiers and investors, with an exemption for new housing developments. - read more
The Reserve Bank of Australia (RBA) has released its October 2025 Financial Stability Review, providing a comprehensive assessment of the nation's financial system amidst a backdrop of global uncertainties. The report underscores that while Australia's financial institutions remain robust, external factors pose significant risks that warrant vigilant monitoring. - read more
The Australian Financial Security Authority (AFSA) has reported a notable decrease in personal insolvencies for October 2025, signaling a positive trend in the financial health of Australians. A total of 1,116 new personal insolvencies were recorded, down from 1,169 in September 2025 and higher than 1,009 in October 2024. - read more
The Australian mortgage market has reached a new milestone, with the total value of residential mortgages climbing to $2.41 trillion in November 2025. This growth is largely attributed to escalating property prices and a surge in lending activity. - read more
Debt consolidation is a financial strategy that has gained widespread attention, especially within the diverse economic landscape of Australia. It involves combining multiple debts into a single, more manageable loan, with the aim of simplifying the repayment process and potentially securing a lower interest rate. This approach can be particularly relevant for Australians juggling various forms of credit, from personal loans to high-interest credit card debt. - read more
Managing personal debt effectively is crucial for maintaining financial stability. Debt, when left unchecked, can quickly spiral out of control, leading to financial stress and a host of other problems. - read more
Financial stability is a common aspiration, yet many Australians find themselves weighed down by the burden of debt. Whether it’s due to loans, credit cards, or unexpected financial emergencies, the struggle to stay afloat is a reality for countless individuals striving to achieve their dreams of a secure, debt-free future. - read more
Welcome to Financial Planning 101: How to Get Ahead of Your Debt! If you're feeling overwhelmed by your financial situation, you're not alone. Many people struggle with managing debt and finding ways to achieve financial stability. - read more
Welcome to our blog, where we're dedicated to helping you make the most of your financial journey. Today, we're going to delve into an important aspect of financial health: tracking your progress after debt consolidation. - read more
