The retail outlook looked positive. But global disruptions are denting confidence.
Just a few weeks ago, the outlook for retail was encouragingly buoyant. Spending was up (4.6 per cent on last year 1), and consumer confidence was holding steady at 91.6 per cent 2.
Then came the conflict in the Middle East, which has sent fuel prices skyrocketing, caused disruptions to shipping routes and delivered a fresh jolt to confidence within the retail industry.
“January traded well, and there was genuine optimism heading into 2026,” says Trent Rigby of Retail Customer Advisory. “However, nobody predicted the Iran conflict and oil shock, and February is already tracking softer.
"The consumer was in decent shape in january. But whether that holds over the next quarter is now a very different question."
Trent Rigby, Retail Customer Advisory
“The consumer was in decent shape in January. But whether that holds over the next quarter is now a very different question.”
Right now, consumers are still spending. But even still, says Retail Doctor Group’s Josh Strutt, they’re being far more deliberate about where they’re spending.
“The retailers that prosper in this environment will be those that create reasons for customers to choose them, rather than relying on consumer spending growth. When spending becomes more considered, factors like brand trust, customer experience and loyalty become much more influential in where consumers choose to shop.”
Numbers to know
22%
The estimated growth in international visitor spend between 2025 and 2030, according to Tourism Research Australia’s latest tourism forecast 3. Over the next five years, total visitor spend in Australia is forecast to reach around $233 billion. This is positive news for retail, especially in tourist hotspots and among luxury and premium retail.
$6.5 million
The Victorian government’s budget to keep Operation Pulse 4- a retail theft and in-store safety initiative - running through 2026. Patrols will continue at a raft of suburban shopping centres after a successful 90-day trial concluded in February.
54%
The year-on-year increase in Gen Z purchases on Roblox between 2024 and 2025 5. These figures - combined with a 10 per cent uptick in Gen Z orders from TikTok - signals a shift in where young consumers are spending money, with gaming platforms and virtual goods competing for wallet share.
Recent retail innovations
Retail media continues its rise
JB Hi-Fi announced in February that it had partnered with Retail MediaWorks and AI-driven commerce media platform Criteo to launch what it’s describing as Australia’s first dedicated consumer electronics retail media network.
The move, which lets brands reach high-intent shoppers across JB Hi-Fi’s 207 stores and digital environments, reflects the continued rise of retail media as brands look for new high-margin revenue streams.
Bunnings brings instant commerce
Hardware giant Bunnings is offering customers one-hour delivery on DIY, garden, household and pet products, courtesy of a new partnership with Uber Eats. The announcement comes after a trial phase at five stores in Melbourne, which began in January. Bunnings is set to launch more than 30,000 items, going straight in at number one on the list of the delivery app’s biggest suppliers. Bunnings joins a growing list of retailers experimenting with rapid delivery via Uber Eats, from Petbarn to Officeworks.
Game, set, sales
It isn’t just crowds that are growing at the Australian Open; the tournament also reportedly doubled its sponsorship revenue over the past five years. The number of event partners has climbed to 50, including a growing mix of non-traditional brands, from Realestate.com.au to appliance maker Haier, which staged a playful activation inviting players to take aim at washing machines and dryers. The popularity of the Open, alongside Melbourne’s other key sporting event, Formula 1 Grand Prix, highlights how large-scale sporting events have become powerful marketing platforms for brands across industries.
Sources: 1 ABS, 2 Trading Economics, 3 Tourism Research Australia, 4 Victoria Premier's Office, 5 Retail Technology Roadshow
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