Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Friday, April 27, 2012

Economic Structure and Performance of the Australian Retail Industry

Posted by D. Danel Sokol

Productivity Commission of the Government of Australia has a new report on Economic Structure and Performance of the Australian Retail Industry.

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.

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