Sales are rising, but demand remains subdued as inflation, and the search for value reshape Australia's retail landscape.
Retail sales may be rising, but beneath the headline numbers, Australian consumers remain cautious.
Although April sales were up by 4.9 per cent1, it’s likely that much of that growth comes down to higher prices, rather than shoppers filling their baskets with more products.
“Total spending is up, but most of that is price and population growth,” says Trent Rigby of Retail Customer Advisory, who describes demand as “pretty flat”.
“Consumer confidence has dipped and there’s no real dressing it up.”
Trent Rigby, Retail Customer Advisory
“Consumer confidence has dipped and there’s no real dressing it up.”
Rigby believes that the key to success, right now, is to lean into value.
Josh Strutt of The Retail Doctor agrees. “The customer is still in a controlled-spend mindset – they are more selective, more comparative and more likely to delay purchases that do not feel urgent or clearly worthwhile.”
Demand is still there, he says. “But retailers need to earn it more clearly by realising the importance of customer relevance, visible value and a clear reason to choose one brand over another.”
Numbers to know in retail
393%
Traffic Boost2 from AI during the first quarter of 2026.
A survey by Adobe Business Insights revealed that AI traffic to businesses has accelerated across all industries - but that retail had the strongest growth. In April, more than a third of consumers said they had used an AI assistant during the shopping process.
70%
The proportion of shoppers who want clear delivery times
Nearly three-quarters of shoppers say poor delivery communication at checkout makes them less likely to purchase, according to Australia Post’s annual e-commerce report3. Delivery speed also emerged as a key priority, with most Gen Z and Millennials willing to pay more for same-day and next-day delivery.
One in six new cars4 sold in April were electric
EVs accounted for a record share of Australian new car sales for a second consecutive month amid uncertainty surrounding petrol supply and cost. For retailers, the shift to EVs highlights how quickly consumers will embrace new products with a clear economic benefit.
Recent retail innovations
AI-powered airport shopping
WHSmith has teamed up with Melbourne Airport to roll out IMo, an AI-powered retail assistant designed to streamline the airport shopping experience. Time-poor travellers can access AI-driven shopping support and product recommendations from their smartphones via QR code.
A bookless bookstore?
Audible recently opened a New York pop-up bookstore where shelves were lined with “story tiles” (physical renderings of book covers) to drive subscriptions for audiobooks. The Audible Story House aimed to bring their digital product to life, and it also offered classes, a listening bar, listening booths and a cafe.
Reshaping retail returns
Uber just announced a new service to smooth the retail return process. Customers can order a return through the Uber app, and a courier will pick up their item, and process the refund that day. So far, the service is only available with a select group of US retailers (Best Buy, Dick’s Sporting Goods).
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