Deloitte’s Retail Report 2026: Peak Season, Peak Stakes

27 AUGUST 2026: Australian retailers are racing to adapt as online marketplaces, rising retail crime and renewed cost-of-living pressures collide ahead of the all-important holiday trading season, with softer growth expectations and tighter margins looming over the year ahead.

That’s according to the 15th edition of Deloitte’s annual Retail Report, which surveyed 150 Australian retail executives and 1,000 consumers on expectations for the November-to-Boxing Day trading period and the pressures facing Australian retailers over the next 12 months.

A FROSTY FORECAST FOR THE HOLIDAYS AND YEAR AHEAD

Retailer sentiment towards the holiday trading period has slipped from last year’s highs, with 77% expecting sales growth this season compared to 84% last year, while margin expectations have softened.

And although consumers have accepted that inflation is a fact of life, 34% plan to respond to the cost-of-living squeeze by restricting their spending, 32% by switching to cheaper options and 11% expect to delay purchases this holiday season.

The next year is unlikely to bring much relief, with Deloitte Access Economics modelling pointing to a more subdued consumer environment as inflation continues to outpace wage growth and cost-of-living pressures weigh on household budgets.

Deloitte Access Economics forecasts household consumption growth of just 1.3% in 2026–27, down from 2.3% in 2025–26. With real wages back around 2011 levels, many households are likely to keep reducing discretionary spending or dip further into savings.

Retailers are also approaching the next 12 months with greater caution. Just 52% expect consumer confidence to improve, down from 74% last year, while 19% expect it to deteriorate, as cost pressures, competition and macroeconomic uncertainty continue to weigh on sentiment.

Deloitte Consumer Products & Retail Partner Damien Cork said: “Australians are still finding ways to take part in the holiday season, but they are doing it with a much sharper eye on value. Some are cutting back on themselves so they can still spend on family and friends, while others are staying home, waiting for deals or switching when the price no longer stacks up.”

Deloitte Partner and Consumer Products & Retail Sector Lead Louise Heath said: “Retailers are entering the year ahead with a clear understanding that consumers remain under significant cost-of-living pressure. Those that navigate this environment successfully will be the ones that know when to drive demand, when to protect margin, and how to offer customers compelling value and a clear reason to choose them.”

ONLINE MARKETPLACES RESET THE VALUE BENCHMARK

Online marketplaces have moved from a fringe competitor to a mainstream part of the Australian shopping journey, impacting shopper expectations in terms of price, choice and service.
Nearly half of consumers (48%) now often or always consider ultra-low-cost online marketplaces when shopping online, while a further 28% consider them at least some of the time.

Their appeal is not limited to lower-income households either, with 67% of consumers earning $200,000 or more always or often considering these platforms.

Retailers are clearly feeling the pressure. Almost eight in 10 retailers (79%) are concerned about competition from online marketplaces, while 61% cite online marketplaces as a source of increased competition over the next 12 months, up from 28% last year.

Damien Cork said: “This is about more than a customer buying one product from an online platform instead of a local retailer. These marketplaces are changing what shoppers expect from everyone, because price, range and convenience can now be compared in seconds. Local retailers need to focus on value beyond discounting by leaning into product quality, trusted service, loyalty, fulfilment and customer experience.”

AGENTIC COMMERCE MOVES INTO THE MAINSTREAM

Consumer adoption of AI-assisted shopping is building, with consumers most willing to use AI for practical parts of the shopping journey such as comparing products and services, finding and applying discounts, and negotiating or price-matching.

The strongest willingness is around tasks that help shoppers make faster, better-value decisions, with 63% willing to compare products and services, 59% to find and apply discounts immediately, and 55% to negotiate and price-match.

While current use remains lower than future willingness, a clear trend is emerging. Agentic commerce has the potential to redefine the customer journey from inspiration to transaction. Consumers are becoming more open to agentic AI tools and shopping bots that improve value and simplify decision-making, creating a significant opportunity for retailers that can make these experiences trusted and useful.

Damien Cork said: “Shoppers are adopting AI more gradually than some retailers expected, and many are still relying on familiar behaviours while experimenting with emerging tools. But the future potential is clear, particularly where AI can help consumers compare products, find discounts and negotiate a better price before transacting through the agentic platform.”

Louise Heath said: “Retailers need to start getting ready for the agentic customer by adapting their propositions, experiences, channels, pricing and value capture. Those that connect agentic AI to trusted product data, availability, pricing, fulfilment and service will be best placed to participate in this new ecosystem.”

RETAIL CRIME ADDS ANOTHER COST PRESSURE

Retail crime is adding another layer of pressure for retailers already navigating softer sales expectations, compressed margins and a more price-sensitive consumer. The report found 37% of retailers reported sustained or increased shrinkage over the past 12 months, with theft, fraud, organised crime and threatening customer behaviour all contributing to higher costs and a more difficult operating environment.

The pressure is particularly acute in food and grocery stores, where retailers expressed the highest level of concern around aggressive and violent customer behaviour. The report also points to a broader shift in attitudes, with consumers aged 18–34 more likely than older Australians to consider some forms of theft justifiable.

Many retailers are responding by investing in conflict resolution and safety training, increasing surveillance, tightening store protocols and working more closely with police and retail crime networks. More than a third (36%) are now partnering with local law enforcement or retail crime networks, up from 23% last year.

Louise Heath said: “Retail crime is no longer simply a store-level issue. It is increasingly impacting the cost base, employee safety, customer experience and, ultimately, margins, at a time when retailers have less capacity to absorb additional pressure. As a result, retailers need to consider retail crime holistically, looking well beyond what happens at the checkout.”

About the Retail Report
The Deloitte Retail Report (formerly the Retail Holiday Report) is an annual publication that surveys consumer and retailer sentiment towards the holiday trading period, the year ahead, and other key issues shaping the retail and consumer sector.  This year’s survey was conducted online throughout June 2026.  The retail component of the survey polled 150 retail executives across a range of categories to create a cross-section of the market. The consumer component polled1,000 Australian consumers across a range of ages, socioeconomic and geographical demographics.