How retail performs in 2025, sends an important signal about our broader community wellbeing.
Retailers employ one in ten Australians and contribute a whopping 18% to our annual gross domestic product. There’s a lot riding on the fortunes of this tenacious community who have just battled through one of the most difficult years on record.
Last year, saw subdued spending, punctuated by bursts of intensity mostly during sales events such as Black Friday and Boxing Day. With 5.5% annual growth forecast, Black Friday was a stand out event in an otherwise lacklustre year. However, the driver for this was largely cost-of-living focused as many used the event to secure Christmas gifts at bargain prices as part of managing the household budget.
Retailers have been steadily absorbing higher costs across leasing, wages, insurance, energy and higher costs of goods, services and transportation and more. This comes alongside a retail crime wave that continues to rock the workforce and erode the bottom-line whilst navigating the biggest set of government workplace reforms in decades.
There’s been a lot to contend with and some businesses unfortunately didn’t make it across the finish line.
After five years of continued disruption as usual, we need to see a return of consumer and business confidence.
Much will pivot around the Reserve Bank’s interest rate decisions. The Federal election outcome will also impact confidence and possibly consumer spending capacity.
Amongst the many threats to retail, there are challenges which – if harnessed correctly – could transform into powerful innovation and growth opportunities for Australia.
Artificial intelligence is rapidly changing our world. With giant global disruptors like Temu and Shein becoming a big force in this market, we must empower local businesses to compete. This is particularly important for small businesses who can lack the resources to apply the latest technology.
This can’t be left purely to chance or to individual businesses. It requires collaborative efforts with government to support our ability to play competitively in the space.
Environmental considerations – particularly across packaging and waste – are an important and growing focus that require shared efforts to resolve. As is often the case in this country, we lack scaled infrastructure solutions.
To realistically tackle this challenge, we need collaborative government investment into areas like waste management and the circular economy.
For retail to thrive, we need to embrace a growth mindset.
In this critical election year, political leaders must need to shift away from an us versus them mentality towards a collaborative agenda which can power our community wellbeing.
For more on our ARA election agenda see:
https://www.retail.org.au/wp-content/uploads/ARA-x-NRA-Election-Priorities-Flyer.pdf
This Opinion Piece was originally published in the Herald Sun and Daily Telegraph.
Fleur Brown is ARA’s Chief Industry Affairs Officer
