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Economic Structure and Performance of the Australian Retail Industry

Productivity Commission Inquiry Report, No. 56, November 2011

563 Pages Posted: 17 Feb 2012  

Productivity Commission

Government of Australia

Date Written: November 4, 2011

Abstract

There are almost 140 000 retail businesses in Australia, accounting for 4.1 per cent of GDP and 10.7 per cent of employment. Both current trading conditions and longer term trends are challenging. Retail sales growth has trended down over the past half-decade as consumers save more of their rising incomes and their spending is increasingly directed towards a range of non-retail services.

The retail industry has met many competitive challenges in the past. Online retailing and the entry of new innovative global retailers are just the latest. The intensified competition is good for consumers, but is challenging for the industry which, as a whole, does not compare favorably in terms of productivity with many overseas countries. And the productivity gap appears to have widened over time.

Australia also appears to lag a number of comparable countries in its development of online retailing. The Commission's best estimate is that online retailing represents 6 per cent of total Australian retail sales. In some other countries, online sales figures are higher and set to grow further, as will also happen here. Retailers operate under several regulatory regimes that restrict their competitiveness and ability to innovate including planning and zoning, and trading hours regulations.

Keywords: retail sector, retail industry, domestic retail, international retail, online purchasing, digital economy, retail sales growth, online retailing, planning and zoning regulations, trading hour regulations, workplace relations regulation, GST, low value threshold, imported goods, international parcels

JEL Classification: Z00

Suggested Citation

Commission, Productivity, Economic Structure and Performance of the Australian Retail Industry (November 4, 2011). Productivity Commission Inquiry Report, No. 56, November 2011. Available at SSRN: https://ssrn.com/abstract=2006225

Productivity Commission (Contact Author)

Government of Australia ( email )

Level 28
35 Collins St.
Melbourne, Victoria, Victoria 3000
Australia

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