Australia’s retail sector is undergoing a seismic transformation – one driven by shifting demographics, global brand expansion, and a consumer base hungry for experience over possessions. In this article, the retail team at JLL explore how international entrants, innovative local players and data-driven strategies are redefining what success looks like in modern retail – and why staying ahead means embracing change at every turn.
Walk through any Australian shopping centre today and you’ll feel it – the retail sector is in the midst of a revolution. International brands are making bold entrances, homegrown names are reinventing themselves and a new generation of shoppers is rewriting the rules. The only thing that’s certain? Retail is changing… fast.
We’re seeing a wave of international specialty retailers and automotive brands, particularly from China, entering the Australian market, drawn by strong consumer demand and the country’s reputation as a retail test bed.
Forget the headlines about fashion exits for a moment.
Behind the scenes, the story is much more dynamic: new players are flooding in, and established brands are doubling down on Australia’s potential. Automotive disruptors like BYD’s Denza and Lynk & Co (under Zeekr) are planning to roll into local showrooms. Meanwhile, global retail giants like Panda Mart and Saizeriya have added Australia to the growth trajectory, eager to tap into Australia’s savvy, experience-hungry consumers.
And it’s not just a one-way street – Australian brands are also in demand internationally, particularly in markets like Dubai. With local growth hampered by supply, we’re supporting more retail brands to achieve growth abroad.
Domestic brands: Innovating at full speed
Homegrown heroes aren’t sitting still. Australian food brands are reimagining the drive-through, once the exclusive domain of American fast-food giants. National brands are adapting quickly, expanding beyond traditional formats to meet evolving consumer needs. The result? A new era of convenience and creativity that’s reshaping our shopping landscape.
The generational power shift
If you want to understand the future of retail, look no further than the kids in the food court. Gen Alpha (born 2010 –2024) is already revolutionising the beauty industry with their digital-first mindset and diverse influences. Their global spending power is projected to hit a staggering $8.5 trillion by 2029 – and they’re already influencing 93% of household purchases.
You only have to walk through a local retail centre on a weekend and count the number of Elite Eleven, White Fox or Mr Winston hoodies to know that, while Gen Alpha themselves don’t have significant direct spending power yet, they heavily influence family purchasing decisions.
Millennials and Gen Z are also making waves, prioritising experiences over possessions. A recent McKinsey study found that these generations allocate up to 55% of their discretionary income to experiences. Think lining up for 45 minutes for a pastry filled with hot chocolate, or the latest Hello Kitty x Sofles collab at Chadstone. Retail centres must now provide memorable, shareable experiences that resonate with these experience-hungry consumers.
The data behind the buzz: The numbers tell a compelling story
National retail investment volumes hit $2.9 billion in Q1 2025 (up 29% YoY), with $9.9 billion traded in 2024 (up 39%) and we see this as a very positive story for retail.
- Victoria’s retail sales grew 3.0% in the year to March 2025, outpacing the national average of 2.8%
- Melbourne led the nation in retail property transactions in Q1 2025, with $500 million traded-including the landmark Northland Shopping Centre sale
- Online retail now accounts for 11% of all Australian retail sales, totalling $50.6 billion
- Cosmetics sales are up a dazzling 9.3% year-on-year; cafes, restaurants and takeaway are up 5.2%; food up 2.7%; household goods are up just 0.1%
- Household assets have grown 37% and equity has grown by 42% over the past five years.
We’re continuing to see CBD retail vacancies falling: Melbourne’s at 6.0%, Sydney’s at 7.1%, Brisbane’s at 11.6%, Perth’s at 22.2%, and Adelaide’s at 13.2%.
Fundamentally, retail rents are rising: regional and sub-regional rents are up 0.7% and 1.3% YoY, while neighbourhood and large-format retail are up 1.4% and 2.2%.
Thriving in a tight market
In the face of low supply, increasing rents, and some retailer exits, JLL is taking a proactive approach to support clients. Here’s how:
1. Strategic tenant mix: Balancing global brands, local innovators, and experience-driven concepts.
2. Repurposing spaces: Transforming vacant stores into flexible, multi-use destinations.
3. Experience-driven design: Prioritising Instagram-worthy spaces, digital integration, and community events.
4. Data-driven insights: Using analytics to guide tenant selection, centre layout, and marketing.
5. Global perspective: Bringing international best practices to Australia and helping local brands expand overseas.
The road ahead: Opportunity in every challenge
Limited supply in the Australian retail landscape, combined with population growth, is something landlords must watch closely. Last year saw the lowest new retail asset supply since 1989 – just 219,116m2, 60% below the 20-year average. Construction costs are soaring: Brisbane up 4.5% since 2019, Sydney up 1.5%, with further escalation of 4.5%–6.0% forecast for 2025 and 2026.
Population growth is forecast at 1.4% per year to 2027; short-term visitor arrivals rebounded 15% from 2023 to 2024.
Chinese tourists spent an average of $9,729 per trip in 2024, compared to $3,630 for UK visitors and $2,979 for US visitors.
While we’ve seen some recent departures, such as Ally Fashion and Mosaic Group, we’re also seeing the emergence of new brands like DISSH, Nude Lucy and Unison.
The focus for the retail sector remains firmly on the fundamentals. Increased bidder depth from a diverse range of capital groups signals an active year ahead.
The tenancy makeup of successful centres is shifting to accommodate the purchasing power of a younger generation, capitalising on increasing rental rates driven by the scarcity of supply. Major A-REITs like Scentre Group and Vicinity Centres have maintained positive re-leasing spreads for three consecutive half-yearly periods.
As the retail landscape continues to evolve, we remain committed to bringing retail brands and investors together, focusing on innovation, experience-driven offerings, and strategic expansion. By staying attuned to generational shifts and emerging trends, retail centres can position themselves not just as shopping destinations, but also as vibrant hubs of commerce, community and experiences that resonate with the consumers of today and tomorrow.
This article byLee McLaughlin Head of Retail Leasing, Tenant Representation & Specialty Mall Leasing, JLL; Rebecca Norton Executive Director – Retail, JLL and James Hayward Research Analyst, JLL is featured in the latest edition of SCN magazine.
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