Economic Dashboard

Supermarket and grocery turnover reached $145.6 billion on an annual rolling basis through June 2025, representing 137.3% growth from the September 2006 baseline of $61.3 billion. This substantial nominal expansion stems from three reinforcing factors: population growth of approximately 30% over the period mechanically increased the customer base; food price inflation substantially outpaced general CPI, with fresh produce, meat, and packaged goods all experiencing multi-decade price increases; and consumption patterns shifted toward eating at home rather than dining out as restaurant prices surged and household budgets tightened. The absolute turnover figure of $145.6 billion translates to roughly $5,300 per capita annually in supermarket spending, highlighting groceries' substantial claim on household budgets. Market concentration in this sector proves extreme, with Woolworths and Coles commanding approximately 65-70% combined market share, followed by Aldi, IGA, and smaller independent operators. This duopoly structure generates ongoing political and regulatory scrutiny around pricing power, supplier treatment, and consumer choice—particularly during periods of elevated food inflation when margin expansion attracts criticism. The pandemic accelerated online grocery adoption, with click-and-collect and home delivery services now comprising an estimated 10-15% of supermarket sales compared to minimal penetration pre-2020. However, the high costs of online fulfillment—picking, packing, refrigerated transport—squeeze margins and raise questions about long-term profitability of digital grocery channels at current pricing.

Electrical and electronics retail turnover totaled $26.2 billion annually through June 2025, up 66.5% from the September 2006 baseline of $15.7 billion—the weakest growth rate among major retail categories despite technology's increasing importance in daily life. This subdued nominal growth masks dramatic volume expansion: Australian households purchased vastly more devices, appliances, and electronics over the period, but unit prices declined sharply due to manufacturing efficiency gains, technology commoditization, and intense online competition. Categories like televisions, computers, and smartphones saw 50-80% price deflation over the past two decades even as specifications improved dramatically, creating a headwind for dollar turnover growth. The "Other Retail" category reached $70.1 billion, up 160.6% from the $26.9 billion baseline—a broad bucket encompassing clothing, footwear, furniture, homewares, sporting goods, and various specialty retail segments. This category's strong nominal growth reflects both population expansion and premiumization trends in segments like activewear, furniture, and homeware where consumers traded up to higher-quality products. However, the aggregate figure conceals sharp divergence: fast fashion and discretionary apparel faced margin pressure and market share loss to online competitors, while furniture and homewares benefited from pandemic-era nesting behaviors and sustained housing market activity that drove demand for furnishings and renovations. Specialised food retail—artisan bakeries, butchers, delis, organic grocers—recorded $13.0 billion in turnover, up 79.9% from $7.2 billion, capturing the premiumization of food consumption as higher-income households sought quality, provenance, and specialty products beyond supermarket offerings.

The retail sector's compositional dynamics reveal broader shifts in consumer behavior, household budget allocation, and competitive landscapes. Supermarkets' commanding 60% share of the captured retail categories ($145.6B of ~$255B total) reflects food's non-discretionary status and limited substitution possibilities—households must eat regardless of economic conditions, providing grocery retailers with defensive earnings characteristics. The weak electrical/electronics growth despite technological proliferation demonstrates how price deflation can overwhelm volume gains, creating challenging economics for bricks-and-mortar retailers competing against online pure-plays with lower overhead structures. Amazon's entry into the Australian market intensified this pressure, forcing incumbent retailers to match prices while bearing higher cost structures—Officeworks, JB Hi-Fi, and Harvey Norman all faced margin compression as they invested in online capabilities and price competitiveness. The rise of specialised food retail signals income polarization: higher-earning households increased spending on premium food experiences and artisan products, supporting independent retailers and niche chains, while cost-conscious households concentrated spending at discount supermarkets and focused on value. Per-capita retail spending growth substantially lagged income growth over the period, indicating declining retail share of household budgets as housing costs, utilities, and services claimed increasing portions of disposable income. Looking forward, retail faces persistent headwinds from elevated mortgage servicing costs that suppress discretionary spending, ongoing e-commerce penetration that advantages low-cost operators, and potential consumption weakness if labor market softening reduces income growth. The essentials-focused spending pattern appears entrenched, with supermarkets likely maintaining dominance while discretionary categories face volume pressure absent meaningful real income growth that restores household purchasing power.