This year's Inside Retail Australian Retail Outlook 2024 Powered by KPMG, shares many insights into the current and future retail landscape across areas like cost out and productivity, cyber and technology, supply chain, working capital and beyond.

As we settle in to 2024, we are expecting more of the same from last year, particularly with interest rates continuing to put pressure on customers. Yet adversity can be a catalyst for innovation and positive change. There is a chance now for retailers to turn today’s challenges into opportunities by differentiating themselves through investment in technology, product innovation and customer experience. 

The report also offers commentary from some of Australia’s leading retail CEOs and bespoke insights into the New Zealand retail market. 

Retail outlook for 2024

Biggest challenges

A big squeeze
Falling customer spending and rising costs

Growing cyber threats
Retail data is irresistible to hackers

Cash flow and working capital
Under pressure until 2025

Top priorities

Automation and AI
For better business outcomes

Supply chain resilience
Doing nothing is risky

Customer retention
More important than acquisition

Customer expectations

A key driver of advocacy and loyalty1

Sustainability and ethics
Most customers are willing to pay more1

Seamless, omnichannel presence1
As a bare minimum

There are two areas where we will continue to invest over the medium term, digital enablement and sustainability. On digital, we want to make things easier for our customers to play with us. We don’t want to create clutter and noise, we aim for quality over quantity, this means we must be smart about how interact with our customers. The key will be to use data with precision so what you offer them matches customer needs and wants

Angus McKay, 7-eleven

Angus McKay

CEO, 7-Eleven

Seamlessly integrating innovation across the value chain and crafting unforgettable customer journeys will be the currency of success. This will propel retail businesses beyond transactional exchanges, into a future of lasting connections and sustainable growth.

Scott Fyfe, David Jones

Scott Fyfe

CEO, David Jones

Retailers need to continue to invest in digital, data and customer insights. But also physical instore environments need to keep pace with the expectations of customers.

Daniel Bracken, Michael Hill

Daniel Bracken

CEO, Michael Hill

Data will continue to be a key investment for retail and will help us unlock new levels of value creation – that will ultimately benefit consumers. Data can deliver efficiencies in operations, but the real value is in using it carefully to drive growth and deliver an augmented customer experience through things like enhanced design capability, product availability and personalisation as well as automation that drives better efficiencies, and ultimately a better customer experience as a result.

John Gualtieri, Kmart & Target

John Gualtieri

CEO, Kmart & Target

Six focus areas for Australian retailers

Here are six focus areas for Australian retailers to turn today's challenges into opportunities.

1. How can retailers implement profitable cost and productivity strategies?

Falling consumer spending at one end and increasing costs at the other is squeezing Australian retailers.

The Q3, 2023 Producer Price Index recorded the highest rate of growth in production costs since the same quarter last year, while margins were impacted by a weakened Australian dollar and strong annual wage growth.2

Read the full article (PDF 13.3MB)

2. Can retailers protect themselves and customers from financial crime?

The retail sector is undergoing a digital metamorphosis, and the cyber teams keeping it safe often must balance meeting business expectations with evolving technology.

With a wealth of customer information on hand, including identity and credit card information, retailers have become irresistible to hackers and scammers. We have already seen a number of high-profile data breaches across Australia, yet many businesses mistakenly believe that cybersecurity is a technology issue, when in fact it spans the whole business and requires ongoing management.

Cyberattacks happen in their thousands – daily – yet just one can have long-lasting repercussions on a retail business across its finances, reputation, operations, legal, stocks and market share.

To protect themselves, we believe retailers must take measured steps as part of their BAU cyber practice.

Read the full article (PDF 13.3MB)

3. Could AI help the retail industry thrive?

AI has huge potential in the retail sector, helping drive better business outcomes across customer experience, commercial effectiveness, operational efficiency, and cost optimisation.

For example, AI can support retail across:

  • customer support via chatbots
  • omnichannel processes
  • product range optimisation
  • more accurate forecasting
  • freight optimisation
  • supply chain resilience.

To make the most of this emerging technology, retail businesses need to start laying the groundwork today.

Read the full article (PDF 13.3MB)

4. Can retailers improve supply chain resilience through automation and AI?

Recent supply chain volatility has started to subside, allowing supply chain leaders to focus on the future. However, with unfavourable economic forecasts, they remain under pressure to find cost savings. On top of that, ESG requirements and potential collaboration opportunities remain a consideration.

Planning for resilience is the critical next step. KPMG’s Global Head of Supply Chain, Peter Liddell, says, ‘Businesses must seize the day by investing to become future-ready. The biggest risk to supply chains in Australia right now is to do nothing.’

We have identified two trends that point the way forward for supply chains:

  1. Automation across the mid-market level, including software and manual task automation.
  2. AI providing opportunity for early adopters, particularly in last-mile logistics, and supply chain planning. 

Read the full article (PDF 13.3MB)

5. Could retailers manage working capital through sustainable cash flow improvements?

Cash flow and working capital is likely to be a key issue for retailers in the lead-up to 2025. In the coming years they will need to deal with inflationary pressure, higher costs across areas like freight and utilities, and dampened consumer demands.

Working capital will be key to helping retailers maintain a positive cash flow. And to manage it effectively, they will need to navigate three issues: inventory management, government regulation, and inflation.

Successfully managing working capital takes continued and consistent effort. We recommend:

  • leaving no stone unturned
  • focusing on momentum
  • having a plan
  • getting help
  • keeping it simple.

Read the full article (PDF 13.3MB)

6. How can Australian retailers manage retail business turnarounds?

A perfect storm of the rising cost of doing business and falling consumer spending is likely to weigh on the fortunes of some retailers in 2024. Here are four rules to managing a turnaround.

  1. Recognise the problem early – when a business is financially challenged, time is of the essence. Retailers must acknowledge performance problems while there is still time.
  2. Take the lead – make sure you have the right people to get the job done. Leading a business through a turnaround requires the confidence of key stakeholders that the Board and management team is up to the task.
  3. Be diligent – retail turnarounds don’t just happen; they demand a diligent approach to the strategic and tactical initiatives that will drive the future performance of the business.
  4. Know when to quit – unfortunately, the best laid plans don’t always work. Directors should remain contextually aware of the business performance and the viability of the turnaround plan at any given point.

Read the full article (PDF 13.3MB)

How KPMG can help

Growth starts here

We support Australian retailers in navigating the current business environment and planning for what’s around the corner.

Our retail group offers audit, tax and advisory services geared to the unique needs of the retail industry. We help our clients deal with a range of issues including supply chain efficiencies, digital transformation, cybersecurity and trust, customer segmentation, customer experience design and more.

Please get in touch if you’d like to discuss this report or how we can help you.

KPMG Australia’s retail specialists


  1. Customer Experience Excellence report 2023 (PDF 1.7MB) (
  2. KPMG Retail Health Index December 2023; Wages pg 6