The Fair Work Commission has announced a minimum wage increase of 3.5% for FY26e. With a further 0.5% increase in superannuation payments, retail wage rate growth will be 4.0% in FY26e. This will be challenging for most retailers to offset given sales growth is likely to be 2%-3%. The retailers with the biggest challenge include Woolworths, Coles, Accent Group and Bapcor.