Australia’s retail industry has evolved to become one of the country’s major economic forces and its largest employer, providing a platform for entrepreneurship and innovation.

Over the past 50 or so years, Australian shopping centre developers have become leaders in retail development and management throughout the world.

Factory outlet centres selling excess product and seconds below recommended retail prices have become popular destinations in recent years, as have ‘homemaker’ or ‘bulky goods’ centres. 

In the recently published book Retail is a University[1], authors Peter James Ryan and Gerard Manion highlight the magnitude of the retail industry in Australia…

As the largest employer in this country, the Australian retail industry has been shaped significantly by federal, state and territory labour laws. Founded in 1908, the Shop, Distributive and Allied Employees Association is the largest trade union in Australia with more than 230,000 members. It has branches in every state and one in the Newcastle, Hunter Valley and Central Coast region. 

A plethora of Awards and enterprise agreements covers employment in the retail trade. The industry is characterised by a high degree of casual, part time and seasonal employment and high staff turnover rates mean retail shops face continual recruitment and training challenges.

It was not until the 1880s that retail became more than a necessity to Australians and became a leisure activity, according to the authors of What’s in Store: A History of Retailing in Australia [2]. As gold mining and wool and wheat exports created wealth, the ‘well to do’ came to view shopping as a form of entertainment. 

In the first half of the nineteenth century, large department stores became a prominent feature of the Australian retailing landscape. 

The first department store opened in Sydney’s George Street in 1838 – a David Jones store.[3] Other department store chains came and went, including Aherns, Allan & Stark, Allens, Anthony Horden & Sons, Buckley & Nunn, Cox Bros, Daimaru, David Wang, Farmers, Finney Isles, Foy & Gibson, Georges, GP FitzGerald, Grace Bros, John Martin’s, Lamberts, Mark Foys, McDonnell & East, Miller Anderson, Overells, Parry’s, Paynes Bon Marche, Stirlings, TC Beirnes and Waltons.

But the emergence of suburban shopping centres in the 1960s and 70s was the catalyst for a steady decline for standalone department stores as shoppers grew to enjoy the convenience and variety offered by shopping centres closer to home.

Today, only four department store chains remain in Australia – Myer, David Jones, Harris Scarfe and Dimmeys-Forges.

The Westfield Group became a driving force in the development and management of shopping centres in Australia and subsequently the world over.

In 1958, Frank Lowy and John Saunders opened their first shopping centre – Westfield Plaza – in Sydney’s western suburbs[4]. At the time, one or two small shopping centres run by department stores already existed in Australia. 

Two years later, Westfield Development Corporation floated on the stock exchange.

Today, the Westfield Group has interests in total assets of A$62.6 billion, representing 119 shopping centres in four countries with over 10.3 million square metres of retail space, making the Westfield Group the largest Australian property group listed on the ASX and the world's largest retail property group by equity market capitalisation. 

The evolution of supermarkets has also had a large impact on Australia’s retail landscape. Looking at a snapshot of the retail scene in 1966, the ‘Big Six’ in Australian retailing were considered to be Woolworths, Coles, Myers, Grace Bros., David Jones and Waltons department store. Riding the strength of supermarket retailing, Coles and Woolworths were at that time well on their way to becoming Australia’s largest retailers. A 1966 issue of trade magazine Inside the Food Industry observed that:

Woolworths and Coles are now nearing 10% of total Australian retail sales. They are opening more stores than anyone else. Woolworths opened 43 in 1966, almost all of them supermarkets, and Coles opened 39 in the year to June 25, including 25 supermarkets. And yet, with all this expansion and the fineness of profits on groceries (Woolworths makes only 2.5% net profit on total sales, and Coles makes 3.5%), they continue to do consistently better than other big retailers.

Inside Retailing Magazine’s 2007 list[5] of Australia’s Top 10 retailers puts Woolworths at the top with annual sales of $31.1 billion and Coles second with $28.6 billion in sales annually. Other retailers who made the list include Harvey Norman, Bunnings, Myer, David Jones, Aldi Supermarkets, Reece Australia, JB Hi-Fi, The Good Guys and Repco (in order of turnover size).

The rise of so called ‘category killers’ in recent years (for example, Bunnings) has meant that retailers in Australia must work harder to highlight their point of difference and area of speciality.

Franchising has become a major retail model for expansion in Australia over the past three decades but appears to be slowing. Franchising offers the prospect of rapid growth without the establishment costs, no direct staff employment and economies of scale in buying stock and marketing. In Australia, franchising is regulated by the Franchising Code of Conduct, one of the most comprehensive codes anywhere in the world. The Franchising Code of Conduct is a mandatory code under the Trade Practices Act 1974 and as such has the force of law.