We have updated our forecasts for online retail sales growth and penetration in Australia. FY25 was defined by strong online sales growth in marketplaces, food delivery and electronics. We have revised our long-term forecasts with higher penetration in online food as the supermarkets embrace food delivery aggregators and click & collect. We have slightly lowered our non-food forecasts. The emphasis remains on the profitability of online retailing for bricks & mortar retailers as well as the threat of Amazon to Australian retailers as they expand their footprint.

We have produced a chart pack showing the growth trends for online retail in Australia. It is in double-digit growth again after a pause in the 2023 calendar year. The growth is strongest for those with the biggest presence online – supermarkets, Amazon, Temu and Shein are all growing rapidly. While online is growing fast, it is happening with a stronger emphasis on profitability than five years ago. We expect retailers with a stronger online presence to have faster sales growth. However, the medium-term risk remains margin dilution for incumbent bricks & mortar retailers as the online sales may not be incremental.