Australia’s retail landscape has been quietly but decisively changing. Over the past decade, shifts in consumer behaviour, the rise of e commerce and evolving lifestyle preferences have transformed not just how we shop, but where and why we do it. These changes are now flowing directly through to commercial property markets across the country.
Convenience Driving Digital Shift
Online shopping is now firmly embedded in everyday life. By early 2025, e-commerce accounted for around 11% of total retail sales, and that share continues to grow. Consumers are increasingly prioritising convenience and price, with platforms such as Temu and Shein gaining traction by offering low-cost, fast-turnaround products.
For traditional mid tier fashion and general merchandise retailers, this has created sustained pressure. Many have struggled to maintain foot traffic and sales volumes, particularly in locations without strong differentiation or convenience advantages.
Shopping Experience Matters
At the same time, Australians are seeking experience-driven shopping, placing higher value on lifestyle, dining, wellness, and leisure components within retail precincts. Cafés, boutique gyms, and entertainment venues now compete effectively for retail space previously dominated by traditional retailers. This trend has supported activity in food and lifestyle-oriented sectors, even as goods-focused retailers continue to retrench, particularly in secondary shopping strips and centres without strong anchor tenants.
Location Still Matters
These shifts are playing out unevenly across markets. In South Australia, Adelaide’s CBD core shows relatively low retail vacancy of around 4.6%, yet precincts such as Hindley Street continue to experience elevated vacancies, close to 15%, partially offset by the influx of convenience and hospitality tenants. Norwood’s Parade and Jetty Road Glenelg have also seen rising vacancies in recent years, highlighting the challenges faced by traditional retailers in high-rent or secondary locations.
These patterns underscore the selective nature of demand within the market, favouring locations that combine visibility, foot traffic, and experiential offerings. In Adelaide there is also a consensus that we will only shop if we can get an easy parking space nearby, thus adversely impacting some retailers without such amenities.
Retail Closures Signal Structural Change
Retail closures and rationalisation have been particularly pronounced among mid-tier and legacy brands. Jeanswest, an iconic Australian fashion retailer, provides a stark example, closing its remaining 90 stores after struggling to compete with online fast-fashion rivals. The exit of such established brands highlights the structural pressures on bricks-and-mortar retailers and the need for commercial landlords to adapt leasing and asset strategies to maintain occupancy and investment performance. Other retailers across the country have undertaken downsizing strategies or shifted towards smaller, more flexible store formats as part of broader omnichannel approaches. “Omnichannel” for those unfamiliar with the term refers to a retail strategy where a brand provides a seamless shopping experience across multiple channels — both online and offline.
What This Means for Commercial Property
Changing retail behaviour is now a defining influence on commercial property outcomes. Landlords are responding with:
- Greater lease flexibility, including stepped rents and higher incentives to attract tenants, particularly in non-prime locations.
- Asset repositioning toward dining, entertainment, fitness and health services
- Diversification away from a pure retail tenant mix to maintain foot traffic and investment returns.
Prime CBD spaces and regional shopping centres with significant car parking continue to attract international brands and flagship tenants, stabilising rental growth, while secondary streets and ageing centres face ongoing challenges to retain or replace tenants.
Mixed-use development, incorporating residential, office, and experiential retail, is emerging as a strategy to enhance visitation and maintain economic viability. As consumers continue to favour convenience, experience, and omnichannel engagement, commercial retail assets that fail to adapt risk higher vacancy and declining returns. Conversely, well-located, experience-rich, and flexible properties are well-positioned to benefit from ongoing shifts in retail behaviour.
Adapting to the Next Phase of Retail
Importantly, this is a period of strategic adjustment for the Australian retail property market rather than decline Retailers that embrace omnichannel strategies, focus on experience, and align with evolving consumer expectations are driving stable demand, while landlords who adapt their assets and leasing structures are mitigating risk and sustaining value.
In South Australia, as elsewhere, the future of retail property will depend on the capacity to innovate, respond to behavioural change, and reposition assets to meet the expectations of modern consumers.
For owners and investors, the message is clear: retail isn’t disappearing, but it is evolving. Those who adapt will be best placed to benefit from the next phase of the market.