Australia’s retail and consumer goods sector is on the brink of its most radical transformation in decades – and its greatest opportunity. New consumer expectations, and new ways to satisfy them, are creating substantial value for those bold enough to reimagine the business of retail. The competitive edge belongs to those who deepen how they connect: with partners across industries, and with customers who are more informed than ever before.
What if your supermarket becomes your gateway into a connected health ecosystem? What if the AI agent that plans your meals also orders your groceries and tracks your nutrition? Or if AI managed your loyalty across every brand you love, negotiating better rewards and maximising value on your behalf? These things are already happening. Australia’s retail and consumer goods sector has entered its decade of reinvention.
Consumer expectations have outgrown the existing retail model. Customers demand value without compromise, personalisation without friction, and complete solutions to their problems. New capabilities are making it possible to meet these expectations, but they are also raising the stakes. Agentic commerce can turn an online search into a completed transaction. As AI agents become the primary interaction point for customers, retailers who fail to adapt risk losing the customer relationship entirely, retaining the transaction but ceding the connection.
In the next decade, winning won’t come from what retailers own, but from the capabilities they can access—through partnerships spanning data, distribution, sustainability, and direct-to-consumer channels.
Our global Value in Motion research shows that powerful forces such as artificial intelligence (AI), climate change, and geopolitical shifts are reconfiguring retail. Industry boundaries are dissolving, and dynamic domains are emerging.
In the next decade, the retail and consumer sector will need to feed more transparently, make more efficiently, move more sustainably, and care more holistically.
The value at stake is significant. The global opportunity is worth trillions across the Feed, Make, Move, and Care domains that are most relevant to the retail and consumer markets sector. Crucially, value will not be distributed evenly. Instead, it will flow to those organisations bold enough to reinvent.
Consumer markets value at stake by domain (Global and Asia Pacific)
In this new retail economy, growth will come less from what you own and more from how you connect: with partners within and across industries; and with customers who are savvier and more informed than ever before.
In Australia, we're already seeing evidence of this new model. Take Woolworths' investment in Hola Health, a telehealth startup now valued at $70 million (Australian Financial Review, April 2025). Through its Healthylife subsidiary, Woolworths has made Hola its exclusive telehealth provider, allowing customers to book a virtual GP appointment within 15 minutes and earn Everyday Rewards points doing it. Woolworths has entered a new domain, healthcare, with a partner outside its traditional grocery ecosystem.
The early signs are positive. PwC’s 29th CEO Survey – Australian Insights found 51% of Australia’s consumer markets companies gained market share last year, ahead of 45% globally.
What happens next depends on how boldly Australia’s retailers act.
Pressure. Response. Reinvention.
The pressures facing Australia’s retail and consumer sector are nothing new. The sector has long been shaped by consumer preferences, technological disruption, regulatory demands and margin squeeze. Conflict in the Middle East is disrupting supply chains and driving up costs at multiple points, from raw materials to last-mile delivery, accelerating the urgency to reinvent. The difference now? These pressures are arriving simultaneously. They’re compounding, and they’re irreversible:
Shifting consumer expectations: customers want answers.
Today’s consumers don’t want to be sold a product or service – they want a solution to their problem. For example, health supplements curated to their biology, a weekly meal plan built around their budget, or jeans from a retailer that will repair them for the life of their garment. 56% of Gen Z Australians are already using generative AI for meal planning and menu suggestions, compared to just 24% of older generations. And 49% of Gen Z want customised products over off-the-shelf alternatives. The consumer base is getting younger. Today's 7 to 14-year-olds have greater influence over family spending than any previous generation, funded by parents and grandparents, and equipped with digital tools that make purchasing decisions faster and less visible to adults.
Food consumption is changing fundamentally.
The rapid uptake of GLP-1 medications is already reshaping patterns across Australia. Consumers on these medications are eating less, prioritising protein, and reconsidering entire categories, from snacks to soft drinks. For food retailers and manufacturers, this is not a niche trend. It's a structural shift in demand that’s already showing up in category data, and planning for the consumer of 2030 means planning for a population that consumes differently.
Consumer spending is also shifting toward experiences over products.
When Taylor Swift brought the Eras Tour to Australia, more than four million people competed for fewer than 450,000 tickets that sold out within hours, with many paying premium prices to secure a seat. Consumers are choosing how they spend, not just how much. Consumers expect value, convenience, and curation with as little friction as possible.
Our research shows ~90% of CEOs believe customer loyalty is growing, but fewer than half of customers agree. That’s a strategic blind spot. Loyalty is already slipping away, with 52% of consumers halting purchases from brands after a poor experience. Meanwhile, 46% of executives acknowledge that their current loyalty programs will lose relevance within three years. Brands still solving for loyalty with points programs are solving the wrong problem.
The most resilient form of loyalty isn’t earned through rewards, it’s built through relevance. When a brand becomes so embedded in a customer's life, so personalised, and so frictionless, that switching feels like a step backwards, loyalty stops being a program and starts being a habit. This is the model Amazon has built through Prime, and what Woolworths is pursuing through the integration of Everyday Rewards with healthcare services. In this model, loyalty is not a metric to be tracked. It’s an outcome of delivering genuine, compounding value across every interaction. The question for Australia's retailers is not how to retain customers, but how to become indispensable to them.
AI is rerouting commerce.
The loyalty challenge is being compounded by a structural shift in how commerce works. Previous waves of disruption (e-commerce, self-checkout) changed how purchases were made. Agentic commerce changes who makes purchasing decisions and how loyalty is captured. When an AI agent selects a product on a customer's behalf, loyalty to the retailer and the brand becomes harder to distinguish and harder to earn. Increasingly, it accrues to whoever owns the agent.
In Europe, AI agents are expected to drive up to 15% of e-commerce spending by 2030, adopting at up to four times the pace of traditional e-commerce. Australia won’t be immune to this shift, and those who act now will be best placed to capture the opportunity. In Australia, AI intention is high, but delivery lags. PwC’s 29th CEO Survey – Australian Insights found that only 18% of local consumer markets organisations report revenue increases from AI versus 26% globally. Most of Australia’s consumer markets CEOs (79%) are yet to realise revenue gains or cost savings from AI. And while half (49%) say innovation is central to execution, delivery still lags.
The regulatory floor has risen for good.
Mandatory sustainability reporting, modern slavery obligations, Modern Award obligations, increased regulation to protect consumers, and tightening data privacy laws have set a new baseline that permanently increases the cost of doing business. PwC's Global Compliance Survey 2025 found 83% of consumer markets businesses report increased regulatory complexity over the past three years – and the burden is clear: 81% say it's slowing business transformation, 86% say it's straining internal resources, and 85% say it's distracting senior leadership from strategic priorities. In Australia, the gap between ambition and readiness is visible across all these areas: just 15% of surveyed consumer markets businesses have defined processes for managing climate risk in their supply chains, compared with a global average of 24%.
The cost environment is permanently compressing margins.
Geopolitical tensions, trade uncertainties, and higher energy and operating costs (particularly wages) mean margin pressure is now structural. Capital costs are compounding this pressure further. Digital transformation initiatives demand significant upfront investment, while Australia's appetite for bricks-and-mortar retail means real estate and development costs remain among the highest in the region. Unlike many Asian markets, where world-class facilities can be built faster, cheaper, and with tax incentives, Australian retailers face steeper barriers and higher costs to achieve the same outcome – a productivity challenge with no easy fix. Retailers need to seek new revenue streams to relieve this pressure. Yet our recent CEO survey found only a third (31%) of Australia’s consumer markets companies have begun competing in new sectors (compared with 48% globally), suggesting local retailers are absorbing cost pressures. This strategy has a limited shelf life.
In the face of these pressures, tactical responses are not enough. Fundamental reinvention is needed, and leading retailers have already started.
Connection over ownership
What matters is not ownership, but connection – between retailers and technology partners, between manufacturers and distributors, and between primary producers and the consumers who want to know their story.
The results are tangible. Half of all top-performing companies have a clear ecosystem strategy in place and are more than twice as likely to generate at least 60% of their revenues from ecosystem collaborations.
Leading organisations are already moving beyond traditional sector boundaries to forge partnerships that unlock capabilities no single organisation could build alone. These partnerships will shape the next decade. Across Australia, fast movers are already showing what this looks like in practice:
Amazon and Harris Farm Markets: when digital meets physical retail. Australian independent grocery brand Harris Farm uses Amazon Prime’s delivery infrastructure and national customer base to expand its distribution reach, while Amazon adds a grocery offer with an established physical presence and local provenance. This clicks-to-bricks partnership model, where digital and physical complement rather than compete, creates a broader combined offering.
Woolworths and Quantium: when data becomes a platform. Woolworths’ partnership with Quantium shows how consumer data is being used to extend value beyond the point of sale. By combining purchasing behaviour, demographics and shopping patterns, the partnership generates insights for Woolworths and its partners, while giving Quantium access to a large-scale retail data set. The broader significance is strategic: data is no longer just supporting retail operations, but increasingly shaping how retailers understand customers, build partnerships and create new sources of value.
Barriers to transformation
For retailers yet to act, three barriers persist.
The first is short-term thinking. Our survey found more than half of Australia’s CEOs’ time is consumed by short-term matters, with just one day per working fortnight devoted to long-term strategy.
The second barrier is capital: partnerships and platform investment require a return horizon that is mismatched against annual reporting expectations. In Australia, this is compounded by economic structures that don't reward investing ahead of the curve: depreciation guidelines, the absence of meaningful tax incentives for innovation, and a regulatory environment that constrains rather than encourages long-term capital deployment. Administrative processes from council approvals to industrial relations add cost and time that global competitors in more investment-friendly environments simply don’t face. The result is a system that makes it structurally harder for Australian retailers to do what their global counterparts can.
The third hurdle is capability. Many organisations lack the skills, governance structures, and internal incentives to build and run successful ecosystem models. There’s a critical need to invest in developing technical competency and capability, such as advanced analytical skills required to measure and execute these ecosystem plays, as well as robust digital infrastructure to support the seamless integration of partners. Compounding this challenge is the limited experience within the sector—much of this work is unprecedented, given the novel nature of these partnership arrangements. As organisations navigate uncharted territory, the ability to collaborate effectively and maintain a shared focus on joint value creation and customer outcomes becomes indispensable. Australia’s retail and consumer markets sector faces a persistent labour shortage, with around 30,000 job vacancies currently unfulfilled. The response can’t be to simply hire harder. The organisations pulling ahead are deploying technology to do more with the people they have, automating routine tasks, augmenting decision-making, and redeploying human capability toward the higher-value work that partnerships and ecosystem models demand.
These barriers are real. Unlike the structural pressures reshaping the sector, however, they are not permanent. For those retailers and consumer goods companies willing to act now, the opportunities are significant.
Connected and trusted: the new sources of value
The retailers who will shape the next decade share one thing: they know how to connect —with customers, and with partners:
Trust is the currency that makes these connections last. Trust compounds connection, and connection creates value. But trust takes years to build and only seconds to lose. PwC’s 2025 Customer Experience survey found 93% of consumers say they would lose trust in a brand that mishandled their data.
In the next decade, retail and consumer goods organisations will sink or swim according to how well they connect.
Inside the sector
What will we see in Australia’s retail and consumer goods space within the next decade?
Ready to lead the retail reinvention?
The organisations that will lead Australia’s retail and consumer goods sector in the next decade are making consequential decisions today. Ask yourself:
- Are we actively building an ecosystem, or are we waiting for the right moment to move beyond traditional sector boundaries?
- Do we have a credible plan to capture value from AI and partnerships in the next three years?
- Are we transforming at the pace the market demands, and do we have a clear view of the new domains where growth will come from in the next decade?
- How do we build agility to respond to the market? Are we accurately anticipating consumer demand?
- Are we investing in the right capabilities – people, skills, and infrastructure – to support innovation and growth into the next decade?
