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Australian retail in mid-2026 is telling two very different stories simultaneously. On one hand there’s genuine activity, new store formats launching, international brands entering the market, and major precincts expanding. On the other, a familiar squeeze is tightening. Costs are up, consumer confidence is fragile, and some of the country’s most established retail names are pulling back.
Here’s the full picture of what’s happening right now and what’s coming up for the industry.
THE BIG PICTURE: A SECTOR UNDER PRESSURE FROM BOTH SIDES
The headline number looks respectable on the surface. Australian household spending on retail rose around 5.1% year-on-year in April 2026, with Australians spending $39.07 billion across the retail sector.
But dig into those numbers and the picture is more complicated. According to Deloitte Access Economics’ latest quarterly Retail Forecasts, Australian retailers are facing a simultaneous attack from both flanks: rising costs and weakening demand. Events over the first half of 2026 mean increases to fuel, gas, fertiliser and plastic prices due to the Middle East conflict could lead to a 2.1% increase in the Australian retail cost base on top of the inflation the economy is already experiencing.
Deloitte Access Economics expects discretionary spending growth will slow to around 0.7% in the year to December 2026, down from 2.5% the previous year. In its baseline scenario, retail turnover is expected to grow by 1.8% in 2026, down from 2.3% in 2025. Yet the risks are to the downside. Should the crisis in the Middle East extend and amplify, consumer spending could see very little growth over the rest of 2026.
Wage costs are adding another layer of pressure. The Fair Work Commission’s decision to increase minimum and award wages by 4.75% will significantly increase labour costs for retailers already navigating weak consumer demand and rising operating expenses.
And fuel has been a direct operational hit for the sector. The latest ABS Business Conditions and Sentiments survey found 74% of retail businesses were negatively affected by fuel prices or availability. For businesses running delivery fleets, managing store replenishment, or operating across multiple locations, the fuel crisis of early 2026 landed directly on the bottom line.
According to Inside Retail and KPMG’s Australian Retail Outlook 2026, while economic recovery is underway, shoppers remain value-conscious and cautious, demanding convenience, personalisation, and ethical transparency from the brands they support. Growth will not come from business as usual, but from retailers rethinking how they operate, adapt and build human connection.
STORE NEWS: THE OPENINGS WORTH WATCHING
Despite the macro pressures, there’s genuine activity in the market. Some of the most interesting store openings of 2026 tell a clear story about where Australian retail is heading.
Kmart K Home | Box Hill South, Victoria | Mid-June 2026
The first K Home standalone concept store opened mid-June 2026 in Box Hill South, Victoria, covering 3,800 sqm dedicated entirely to furniture, storage, home styling and everyday essentials under the Anko brand. Kmart is creating its own version of a mini-IKEA, dropping its familiar red and blue branding in favour of an orange colour scheme and a showroom-style layout. The concept stocks furniture and storage pieces previously only available online, with styled room sets throughout. Positioned to compete for a slice of Australia’s $27.5 billion furniture and interiors market, with Anko central to Wesfarmers’ ambition to double Kmart’s turnover.
This is one of the most strategically significant retail moves in Australia this year. If the pilot performs as expected, a national rollout could meaningfully reshape the discount homewares category.
Mocka | Maroochydore, Sunshine Coast | Mid-June 2026
Mocka, founded in 2007 and acquired by Adairs Group in 2020, has built a loyal family furniture audience online for nearly two decades. Its first Australian physical store opened mid-June 2026 in Maroochydore, featuring styled room displays, digital pricing screens and a children’s play area. A second Victorian store is confirmed for the second half of 2026.
Three distinct businesses under the Adairs Group, being Adairs itself, Mocka, and Focus on Furniture, are all betting on physical homewares retail simultaneously. This is a compelling category signal that the homewares space is emerging as one of 2026’s most active physical retail battlegrounds.
New Balance Grey Store | Albert Coates Lane, QV Melbourne | June 2026
New Balance opened its first Grey Store in Melbourne at Albert Coates Lane, QV Melbourne, covering 201 sqm. It is the brand’s third Grey Store in Asia Pacific and most elevated retail format in the region. The Grey Store concept is premium, curated, and deliberately different to the standard New Balance retail experience. It signals a continued push from global footwear and activewear brands to establish elevated flagships in Australian cities as an Asia Pacific beachhead.
Burnside Village Stage 6 | Adelaide, South Australia
The largest private sector retail property expansion in South Australian history has doubled the centre’s footprint to 38,500 sqm, introducing over 80 new retailers with a third wave of elevated and premium retailers confirmed from June 2026. Headline names include Tiffany and Co, Gucci, Paspaley, Watches of Switzerland, Ralph Lauren, Zimmermann, Georg Jensen, MECCA in its largest SA location at a two-storey flagship, UNIQLO, Arc’teryx and Salomon, with many making their first entry into the South Australian market.
Burnside Village’s transformation is one of the more remarkable retail property stories in Australia right now. It demonstrates what is possible when a suburban centre commits to genuine precinct investment and brand curation rather than just filling space.
Cartier | Chatswood Chase, Sydney | May 2026
A full Cartier boutique opened at Chatswood Chase in May 2026, bringing the full universe of Cartier to the newly redesigned luxury precinct alongside Dior, Bulgari and ALO Yoga. Chatswood Chase is quietly becoming one of Australia’s most significant luxury retail precincts outside the CBD.
Country Road | Queen Street, Brisbane | Coming August 2026
Country Road is on track to open a new flagship store on Brisbane’s Queen Street in August, alongside three new stores at Chatswood Chase in Sydney in October. This is notable context given the brand is simultaneously closing underperforming locations in Sydney’s CBD, including its longstanding Queen Victoria Building flagship. Strategic rationalisation and selective expansion happening simultaneously is a pattern playing out across several Australian retail groups right now.
POLICY AND REGULATORY CHANGES AFFECTING RETAIL
The Cash Mandate Is Now In Effect
Australia’s new cash mandate, which rolled out on January 1, requires businesses selling fuel and groceries to accept cash for in-person purchases of up to $500, but only for transactions made between 7am and 9pm. The rule mainly applies to supermarket giants like Coles and Woolworths and chain service stations such as Ampol and BP. Small businesses with an annual turnover under $10 million are exempt, although the rule still applies to small businesses operating under a larger retailer’s trademark. The mandate will run for three years after which the government will review its effectiveness.
For major supermarket operators this has meant operational adjustments to ensure cash handling capability at all qualifying locations. The policy has been divisive in industry circles, with some welcoming the financial inclusion angle and others questioning the operational burden and security implications.
Workplace Protection Orders: Tasmania Leads
The Australian Retail Council has welcomed the Tasmanian Government’s commitment to introduce Workplace Protection Orders, describing the reform as a critical step forward in protecting workers, customers and businesses from repeat offenders. Retail crime remains one of the sector’s most pressing operational issues and state-level legislative responses are being watched closely by operators across the country.
UPCOMING RETAIL EVENTS
ARC Retail Awards 2026
Australia’s leading retailers, teams and industry leaders have been named finalists in the 2026 ARC Retail Awards, marking the return of the industry’s premier awards program for the first time in several years. The awards are run by the Australian Retail Council, the industry body formed from the merger of the Australian Retailers Association and the National Retail Association earlier this year. The return of a unified industry awards program is itself a statement about the sector’s intent to consolidate its voice and celebrate its best performers.
EOFY Sales | Throughout June
EOFY Sales running to June 30 represent one of Australia’s biggest retail sale events, a huge clearance and tax season event that drives significant volume across both physical and online retail. For consumers, this is the window to pick up genuine deals as retailers clear winter stock and businesses invest before the financial year end. For retailers, it’s a critical revenue moment in what has been a challenging first half.
End of Season Sales | Throughout June and July
June’s retail calendar is notoriously crowded with promotions. End of season sales are running across apparel, footwear and homewares categories both in-store and online, with discounts across major and independent Australian brands. For value-focused consumers, the combination of EOFY and end of winter season creates genuine opportunity, which is exactly the consumer mood the data reflects right now.
THE TRENDS SHAPING THE SECOND HALF OF 2026
Homewares Is the Hot Category
The simultaneous moves by Kmart with K Home, Adairs with its new concept store format, and Mocka with its first physical store all point to the same conclusion. Homewares and furniture is where the physical retail action is in 2026. The homewares category is emerging as one of 2026’s most active physical retail battlegrounds with Kmart, Adairs, Mocka and Castlery all making significant format moves simultaneously.
E-commerce Brands Moving Into Physical Retail
E-commerce brands are accelerating into physical retail, with Mocka being one of the most compelling examples of a brand that built its audience entirely online and is now betting on physical presence to deepen that relationship. The assumption that digital and physical are in competition has been largely replaced by the recognition that the two channels serve different moments in the customer relationship.
AI Is Moving From Experiment to Operation
AI is reshaping customer experience from personalised service to smarter search and inventory. Successful transformation requires a strategic approach to data quality, cross-functional collaboration, and responsible AI practices. Building trust through robust governance and investing in AI literacy are essential for creating seamless, personalised customer experiences.
The retailers getting ahead on AI are not the ones running pilots and writing press releases about it. They’re the ones who have quietly embedded it in their inventory management, their customer service workflows, and their demand forecasting while everyone else is still deciding on a strategy.
Luxury Is Expanding Into the Suburbs
The Cartier opening at Chatswood Chase and the extraordinary brand mix at Burnside Village signal something important. Australian luxury retail is no longer exclusively a CBD story. Suburban shopping centres are successfully attracting luxury tenants through deliberate precinct investment, while luxury and premium brands continue to invest in flagship and precinct formats despite global market pressure.
Value Remains King
Whatever else is happening in the market, the dominant consumer posture is still value seeking. Rising cost pressures in the sector are presenting a key strategic decision for retailers around what to do about prices and margins. Retailers also need to be aware that consumers can only take so much. Demand side pressures are threatening to bite.
The retailers winning in this environment are doing one of two things consistently. Either they’re offering genuine value at the lower end, or they’re offering a compelling enough experience or product at the premium end that price becomes less central to the decision. The difficult territory is everything in between.
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