AI, Value Shifts & Growth: Redefining Australian Retail
Circana today hosted its annual State of the Industry event, bringing together FMCG and retail leaders from across Australia and New Zealand to explore the data behind performance, pricing, and consumer priorities – and what lies ahead in 2026.
Insights from Circana’s latest analysis reveal a marketplace defined by patchy performance, intense competitive pressure, and rapid transformation driven by technology, consumer behaviour, and shifting definitions of value.
Australia’s FMCG and retail sectors continue to experience variable growth across categories and between online and offline channels. While some segments and brands are accelerating through innovation and strategic pricing, others are feeling the pressure of rising costs, supply-chain constraints, and evolving shopper priorities.
Daniel Bone, Insights Director - Australia, Circana, said: “The Australian FMCG landscape – with more than $175 billion in annual spend – is evolving faster than ever. Growth is uneven, and while cost and competition pressures persist, the opportunities lie in how the industry redefines value, leverages technology, and connects meaningfully with shoppers.
“The convergence of economic, behavioural, and technological change means adaptability is now the industry’s most valuable currency. Those that innovate with insight will lead the way into 2026.”
The event highlighted the growing crime crisis affecting the retail industry, with escalating theft and illicit trade impeding topline performance and distorting industry benchmarks. This trend is not only adding cost and complexity for retailers but is also impacting the overall shopping experience, prompting renewed investment in security, technology, and store-level engagement.
Australia has reached a tipping point in price and promotional activity, with a record share of units now sold on promotion. The heightened role of promotions is increasingly directing store choice and shopper loyalty, forcing retailers and manufacturers to reconsider how they balance value perception with sustainable profitability.
Industry growth leaders are reframing the conversation around value creation, focusing on innovation, quality, experience, and brand purpose to build long-term differentiation.
The expanding availability and affordability of GLP-1 medications is reshaping household habits, with Australian household penetration now in double-digits. The implications are widespread, influencing consumption patterns across food, beverage, and health categories, and prompting brands to rethink innovation pipelines and marketing messages.
Artificial intelligence is moving beyond analytics to become an active agent in shopper decision-making. Circana anticipates that AI systems will increasingly make purchase and media choices on shoppers’ behalf, disrupting how brands engage consumers, how retailers price and promote products, and how marketing investments are deployed.
Amid this evolving landscape, leading brands are finding success by tapping into emerging consumer attributes such as hydration, energy, social currency, protein, nostalgia, permissible indulgence, and premium private label. These trends reflect Australians’ desire for products that balance functionality with enjoyment and individuality.
Staying on top of data and trends is crucial for businesses seeking to anticipate changing consumer needs and identify new opportunities for growth.
