Australian Retail Experiences a Seismic Shift

At the start of the 2020 financial year, traditional brick‑and‑mortar retail models are struggling against the rise of online retail specialists.

This isn’t a battle of good versus evil—it’s simply a new value proposition where customers decide.

Retail Disruption Across Australia

• Commentators call it “disruption”, and it’s affecting every industry.

• Shopping mall landlords and corporate giants use PR spin to deflect negative headlines.

• Smart retailers already see the landscape has changed, with strip shopping and smaller centres in decline.

Shopping Centre Distress

• Regional malls face the first wave of retail downturn.

• Around $11B in shopping centre assets are currently up for trade—three years’ worth of transactions.

• Owners are offloading poor‑performing assets, weighed down by rising land values and softening yields.

• Vacant spaces lead to lower foot traffic, hurting remaining traders and creating a contagion effect.

• Examples: Melbourne’s Docklands precinct, Chapel Street, and Bridge Road—all once thriving, now fading.

The Smartphone Boom and Online Shift

Between 2014–2018, smartphones and tablets transformed consumer behaviour:

• Shoppers embraced the convenience of online purchasing.

• Physical shopping declined as consumers researched and bought from home.

• This shift accelerated the downturn in traditional retail.

NAB Declares Retail Recession

In June 2019, NAB announced that Australian retail was officially in recession.

• Bricks‑and‑mortar growth compared to online amplified the contrast.

• The announcement came just before Wesfarmers’ $230M acquisition of Catch Group, a fast‑growing online marketplace.

Wesfarmers’ Strategic Pivot

• Wesfarmers struggled for years with Target, despite Kmart’s turnaround.

• Acquiring Catch Group was a hard pivot into online retail.

• The move helps Wesfarmers:

  • Build omni‑channel capability to compete with Amazon.

  • Accelerate downsizing of physical store footprints.

  • Protect profitability before losses escalate.

• Bunnings and Officeworks remain strong performers, but Catch strengthens the group’s digital future - well they are hoping it might.

Final Thoughts

The Australian retail recession signals a seismic shift:

• Online retail disruption is permanent.

• Shopping centres face declining relevance and asset distress.

• Strategic acquisitions like Wesfarmers buying Catch Group highlight the urgency of transformation - whether it works out we don't know yet.

The future of Australian retail lies in omni‑channel strategies, customer experience, and digital convenience—not in clinging to outdated models.