Background:

Bricks and mortar Aussie retailers are desperately fighting to stay relevant

David Jones opened in 1838. That's before electricity and before Australia was even a country.

For most of the 20th century, department stores were Australian retail. Need bed sheets, school shoes and a toaster? One stop shop. The model worked beautifully for decades.

But today, Myer, David Jones, Mosaic Brands and Harris Scarfe are all fighting for survival. They've been crushed by soaring costs, shrinking margins and a retail world that's moved on without them.

‍

Where we're at today:

Retailers in the middle are getting squeezed from both sides

The numbers are grim.

• Mosaic Brands, with its 11 labels and 715 stores collapsed entirely by April 2025.
• Harris Scarfe needed a rescue buyout
• David Jones was sold in 2023 for $100 million, down from the $2.1 billion paid in 2014.
• Myer is surviving (barely though) ... its share price is down 93% from its 2009 IPO.

It got so bad for David Jones that even their new owner, Anchorage posted a $74.4 million loss in FY2024.

The problem isn't just costs. It's that the middle has been hollowed out. Want cheap? You go to Kmart. Want convenience? Amazon. A dopamine hit? Temu. Status? Luxury brands.

Amazon now has 8.8 million Australians shopping on it annually, accounting for around 10% of all online retail spending in the country. Temu had 5 million Australian shoppers in 2025, up 17% in a year. Shein hit 2.9 million, growing at 28% annually.

Together, the three now command around 36% of Australia's online marketplace spending and they're still growing. Bricks-and-mortar retailers, with their massive fixed costs are struggling to compete.

‍

Where to from here:

The squeeze still isn't over

Salesforce is forecasting in-store purchases to fall from 45% of all sales in 2024 to 41% by 2026. While in-store sales aren't falling off a cliff, it's a pretty clear directional arrow.

And with labour eating up around 40% of operating costs, margins aren't getting easier anytime soon.

So, who wins?

• The scale discounters (Kmart, Costco),
• The experience-led specialists (think Mecca)
• The online giants (Amazon, Temu, Shein).

Who loses?

• Anyone stuck in the middle with a massive footprint and a fuzzy reason to exist.

For a century, department stores solved a genuinely useful problem - they provided everything under one roof, before the internet did it faster and cheaper. But now a physical store has to be more than just a place to buy stuff. It has to actually make you feel something.

And most of them never quite worked that out. So, if we look to the future, the mid-market retailer isn't necessarily gone but it's likely to look a whole lot smaller from here.