9 Major CHAINS CLOSING Stores Across Australia, Is STAGFLATION Here

Added: 2026-05-05

[00:00:00]The rise of cheap online stores like Teimu and Sheen is crippling Aussie shops with one Melbourne small business declaring that bricks and mortar retail is dead.

[00:00:08]>> Worth's fullear profits plunging nearly 20% despite Australians spending $69 billion at checkouts.

[00:00:16]>> I came on here last night and said, "Oh well, retail sales figures will be out tomorrow and it'll show that everyone has stopped spending."

[00:00:22]>> For the first time in almost a year, we are spending less at the shops. Grocery prices have jumped by 30% under the Albanian government.

[00:00:33]Australia's largest supermarket operator is trying to sell one of its own chains.

[00:00:38]One of the oldest retailers in the country just went into voluntary administration. A department store that has existed for nearly two centuries is seeking emergency funding because the major banks refuse to lend to it. And across the independent sector, supermarkets and food stores are closing at a rate that has no precedent in modern Australian retail history. The government's answer to the recession question is GDP growth of 2.6%. Their tale sector's answer is nine chains simultaneously closing, contracting, or in financial crisis. One of those answers is wrong. And the retail data, which reflects what real Australians are actually doing with their money in real time, never gets revised upward 3 months later. Here is what the government will tell you. The economy is growing, the labor market is holding, and the cost of living crisis is easing. All of that is technically accurate. Here is what the retail sector is telling you. The middle inome Australian who sustains discretionary spending has absorbed thousands of dollars in additional mortgage costs, watched food and energy bills climb for three consecutive years, and responded by cutting back on everything optional and reducing everything else. One of those stories is being lived. The other is being published. The chains on this list did everything right. Loyal customers, decades of trading history, established supply chains, and recognizable brands.

[00:02:00]The market they operated in changed around them. And what changed was the financial capacity of the people they relied on to walk through the door. Nine chains, nine stories. One answer to the question in the title. If you want to see more of this, joining the channel is how you help us continue. Number nine, Big W. Big W sits at the top of this list because of what it reveals about the owner behind it. Big W is a division of Woolworth's Group, the same Woolworth's Group that operates Australia's largest supermarket chain with close to 1,000 full format stores and 32 and a half% of what Australians spend on food. Woolworth's group is the dominant player in Australian retail. It has the supply chain, the purchasing scale, the logistics infrastructure, and the brand recognition that no other retailer in the country can match. And Woolworth's group is trying to sell Big W. Big W posted a $35 million EBIT loss in the financial year to June 2025.

[00:03:02]Woolworth's group began a formal sale process in late 2025, testing market interest from potential buyers, including Walmart, private equity firms, and competing retailers. The chain operates 179 stores with approximately 18,000 employees. The buyers being identified as potential acquirers, Anchorage Capital Partners, Platinum Equity, Oak Tree, are turnaround specialists, firms whose business model involves buying distressed assets and restructuring them. The question that Big W forces into the open is the one this entire list has been building toward. If Woolworth's group with all of its scale, all of its supply chain advantage, all of its purchasing power, and a retail presence in nearly every city, suburb, and regional town in the country is unable to make a discount department store chain work in Australia in 2026. What does that say about the consumer environment it is operating in?

[00:03:57]Woolworth's Group is a company that makes money reliably. It has navigated recessions, pandemics, regulatory scrutiny, and competitive pressure from global e-commerce platforms. It returned 1.72 billion in net profit for the full financial year 2025. Despite the BigW drag, the analytical capability to assess every format in its portfolio is extensive. And the conclusion about Big W is that the format is a drag the business is better off without. What that conclusion reveals about Australian households is this. Discretionary spending has pulled back to a degree that is making formerly viable retail formats unworkable.

[00:04:37]3 years of elevated inflation, 2 years of rate hikes, and persistent housing cost increases have changed. How Australians spend money in ways that look structural rather than temporary.

[00:04:48]Number eight, Target. Target in Australia has 123 stores as of January 2026. That number has been falling for years and the trajectory is structural rather than cyclical. Wes Farmers, which owns both Kmart and Target, made a strategic decision that two competing discount formats in the same company made little commercial sense. Kmart has consistently outperformed Target on traffic, sales per square meter, and customer satisfaction metrics. Kmart's strategy of extremely limited product range at low prices has proven more resilient toneline competition than Target's broader, more conventional department style layout. The response has been gradual but consistent, converting Target locations to Kmart stores, closing underperforming Target outlets, and allowing the Target brand to contract. Analysts at Mcquaryy have predicted store closures will accelerate across Target over the next 12 to 36 months. For consumers who grew up with Target as a fixture of the Australian shopping center, and many Australians did, the contraction is the end of a retail relationship that spanned decades. For the shopping centers losing the Target anchor, it is a footprint challenge that rarely produces a clean replacement tenant. Target is contracting because the owner of a competing business decided Kmart was the better bet and allowed Target's competitive position to degrade accordingly. The business itself is veable. The strategic context surrounding it is the problem. West Farmer's logic is defensible. Kmart's model, extreme range reduction, rock bottom pricing, high volume, has proven more resilient to the dual threat of online competition and cost of living pressure than Target's broader, more conventional format. When budgets tighten, the consumer who might have chosen Target for clothing or homeares migrates to Kmart for the price or Toonline for the selection. Target ends up capturing neither demographic cleanly. The conversion strategy turning Target locations into Kmart stores where commercially viable reduces the exposure to an underperforming format while preserving the real estate position.

[00:06:54]From West Farmer's perspective, it is rational portfolio management. From the perspective of the communities where Target stores have been the anchor of a local shopping center for 30 years, it is the loss of a retail relationship built over generations. Number seven, Mia. Mia has been closing stores for years and the pace has accelerated.

[00:07:14]Brisbane City, Frankston Colonades, Belcon, Hornsby, Wllingong, Brookside, Orange. These are confirmed closures from recent years and the pipeline continues. The financial picture behind the closures is stark. In one recent financial year, Meer's statutory net profit after tax fell 80.3% to 11.9 million on revenue of 3.2 27 billion.

[00:07:40]The company acknowledged the impact of higher mortgage costs on its customer base directly. The people who shop at Meyer are the people carrying variable rate home loans, and those people have been reducing discretionary spending to manage repayments that have risen by thousands of dollars a year. Meyer's structural problem predates the current rate cycle, but has been dramatically accelerated by it. The department store format, which once served as the anchor for major shopping centers and the destination for clothing, furniture, electronics, and home wares, has been hollowed out by category specialists. JB Hi-Fi absorbed the electronics customer.

[00:08:17]Bunnings took the hardware shopper. IKEA and specialty furniture retailers captured the homeares market. What remains in the department store is fashion and cosmetics carried inside a format built for a far broader offer.

[00:08:30]The merger with Premier Investments apparel brands Just Jeans, Portman's, Doy, JJ's, Jackie E may stabilize part of the business. Industry analysts estimate the combined entity could look to reduce total store numbers by 10 to 12% as it consolidates. The merger absorbs fashion brands whose own sales have been declining at a moment when Meyer's core business is also under pressure. For the communities where Meyer has already closed and for the shopping centers filling that space with car dealerships, fitness studios and government services, the era of the Australian department store anchor is ending. It is ending because the middle inome consumer who sustained that anchor has had their discretionary capacity compressed to the point where a department store trip has become an occasional event rather than a regular one. Number six, Drake's Supermarkets.

[00:09:21]In 2020, Drake's Supermarkets walked away from Queensland. The chain had operated in the state for years with stores that were profitable on an operational basis. The problem was wholesale, specifically the pricing Metcash offered for supply made it structurally impossible to compete on shelf price against Woolworths and Kohl's. Roger Drake said so publicly. An operator with annual turnover exceeding a billion dollars and over 5,000 employees nationally, running stores that generated operational profit exited an entire state because the wholesale cost structure made continued operation unviable. In South Australia, an $80 million investment in a private distribution center has salowed the stores to remain competitive. In Queensland, that investment was unavailable and the structural cost disadvantage was unmanageable. The Drake story belongs on this list because it defines the ceiling of what individual operator excellence can achieve in a market structurally disadvantaged against independence. If a well-run billiondoll operator with its own supply chain is unable to make one state work, the conditions facing every smaller independent become easier to understand.

[00:10:34]Drakes is the visible example of a contraction happening invisibly across hundreds of operators who lack the profile to generate attention when they close. The $80 million distribution center that saved the SA operation is unavailable to a family running two or three stores on thin margins. For those operators, the wholesale pricing structure is both a ceiling they are unable to rise above and a floor they are unable to step onto. Number five, IGA. In January 2020, there were over 1,400 IG stores across Australia. As of February 2026, there are 1,279 more than 120 stores, 120 communities that had AIGA and no longer do. The mechanism is structural.

[00:11:24]IGA operators purchase wholesale stock through Metcash at price higher than what Woolworths and Kohl's pay for the same products from the same suppliers.

[00:11:33]That gap lands directly on the shelf.

[00:11:35]When consumer price sensitivity increases, as it has throughout the inflation cycle of 2022 to 2026, the modest premium and IGA charges for local convenience becomes a premium the customer can no longer absorb. Revenue falls. The margin compresses, the store closes, stores are concentrated in exactly the locations where the major chains have decided the economics rule out their presence. Suburbs too small, towns too remote, communities too economically marginal to justify a full format chain store. When an IGA closes in a regional town in South Australia or Western Australia, the nearest alternative may be an hour's drive away. That is the food access picture for regional Australia in 2026.

[00:12:23]120 fewer stores than 5 years ago and a closure rate showing no sign of reversing.

[00:12:28]Metcash has launched online platforms and funded refurbishment programs in genuine effort to stabilize the network.

[00:12:35]The underlying economics have proven stronger than any platform or program.

[00:12:40]An IG operator buying stock through Metcash will always pay more for that stock than Woolworth's pays for the same product. Until that wholesale pricing gap closes through structural reform, the IG network will continue losing stores at approximately the pace it has been losing them. And the communities where those stores were the only viable local option will continue losing food.

[00:13:03]Access they have no practical way to replace videos like this one take a long time to put together. If you want to help us keep going, joining the channel is the simplest way to do it. Number four, Food Works. Foodwork stores are independently owned and operated, shaped around the communities they serve, stocking products the locals actually buy rather than whatever a central planner has optimized for national margins. The chain is run by Australian United Retailers, the second largest independent supermarket group behind Metcash, supporting over $2.6 billion in annual retail sales across over 400 stores in seven states. Those numbers represent what remains after years of quiet undocumented contraction. The economics of running a food works in 2026 are straightforward and brutal.

[00:13:53]Wholesale pricing through AUR runs higher than what Woolworths and Kohl's pay for the same products from the same suppliers. Labor, energy, and lease costs have all increased sharply. And the consumer sitting across from all of those rising costs is more price sensitive than at any point since the early 1990s. The impossible choice facing foodworks operators is this.

[00:14:15]Match the major chain's price and destroy the margin needed to keep the lights on or hold the price and watch the customers leave for Woolworths.

[00:14:22]Anyway, when a food works closes, the decision is usually made quickly and without announcement. The operator surrenders the lease, locks the door, and the community absorbs the loss without anyone measuring it. The cumulative effect of hundreds of those individual decisions playing out across suburban and regional Australia over the past decade is a structural shift in food access that has received almost no policy attention. What every chain on this list has in common. The nine chains on this list are spread across every category of Australian retail, specialty outdoor, mid-market fashion, convenience food, independent supermarkets, a familyrun regional chain, a quiet format withdrawal by a major, an iconic department store, a discount format being rationalized by its parent, and a discount chain being offloaded by the country's largest supermarket operator.

[00:15:16]The closures have different proximate causes. Wholesale pricing disadvantages the independence. Work from home patterns reduced inner city foot traffic. Category specialists hollowed out the department store. West farmers decided one discount format was better than two. The common thread beneath every proximate cause is identical.

[00:15:37]Australian household spending capacity has been reduced by a combination of factors that arrived simultaneously and remain unresolved. Mortgage costs up sharply across two tightening cycles.

[00:15:49]Energy bills up when government rebates expired. Food bills elevated for three consecutive years. Wages growing but at a pace that has consistently lagged behind the compounding of those costs.

[00:16:01]When household spending capacity compresses, the compression moves through the retail economy in a predictable order. Luxury holds because its customer base is insulated by wealth. discount holds because its customer base prioritizes price above all else. Everything in between absorbs the compression and the chains sitting in that middle ground are the ones closing. Barbas Galore is middle ground specialty. Country Road is middle ground fashion. Meyer is middle ground department. Target is middle ground discount. IGA and food works are middle ground food. Cooh's Local and Woolworth's Metro are middle ground convenience. Every chain on this list sits in the middle of a market being squeezed from both ends by the discount operators competing on price below and by the pressured household budget above.

[00:16:51]That is what the list of nine chains is describing. And it is why the recession question in the title is the right question to be asking even if the official answer measured in quarterly GDP figures remains technically no.

[00:17:05]Number three, Kohl's local. Kohl's Local was the small format convenience brand Kohl's built specifically to serve inner city residents, the elderly, the carless, the people who shopped frequently and in small quantities and needed food retail within walking distance. The format has been quietly withdrawn. There has been no announcement. Individual stores have confirmed closure dates. What has happened in aggregate is that Kohl's has determined the small format urban model fails to justify the operational investment required to maintain it at standard. The foot traffic assumptions that made inner city small format retail viable in 2019 have fundamentally changed driven by work from home patterns that permanently reduced the lunch hour shopper count and online delivery that absorbed the convenience-seeking demographic the format was built to capture. Kohl's local sits on this list because it represents something larger than a format decision. It represents the major chain retreat from the communities that small format retail existed to serve urban residents who could walk to a store and who have limited access to the alternatives. The company now expects them to use a delivery app requires a minimum order. A 40-minute bus trip to a full format supermarket requires mobility. For the residents who lived around a Kohl's local, the closure is a material reduction in food access. The company has concluded that material reduction is a commercially acceptable outcome. That conclusion is what belongs on this list. The Kohl's local withdrawal and the Woolworth's metro closures together form a pattern worth naming directly. Both of Australia's major supermarket chains simultaneously built small format inner city brands and both are retreating from them. The two decisions represent the duopoly reaching the same commercial conclusion at the same time about the same community segment. Whether that conclusion was reached independently or reflects a shared assessment of the market is a question the ACC's ongoing oversight of the sector ought to be examining. Number two, Country Road. Country Road is one of Australia's most recognized lifestyle retail brands. Founded in 1974, it has built a reputation for smart casual clothing and home wares that occupies the aspirational mid-market. Premium enough to feel like a treat, affordable enough that middle-income Australians could justify it without guilt during normal economic conditions. These are extraordinary economic conditions. Sales across the country road portfolio declined by 6.2% in the first half of the 2024 to 2025 financial year. The following period saw a further 8% decline. The company announced store closures, including its long-standing flagship in Sydney's CBD, one of the most prominent retail addresses in the country. South Africa's Woolworth's Holdings, the parent company, unrelated to the Australian Woolworth's supermarket chain, engaged Boston Consulting Group to advise on cost reduction across the country road business. That is the language that precedes restructuring. The Sydney CBD closure is the early visible consequence of that restructuring. The Country Road story is the mid-market fashion story.

[00:20:21]The consumer who used to buy a country road jacket as a considered purchase has spent the past 3 years watching that discretionary budget shrink. The mortgage increased, the food bill increased, the energy bill increased, and the country road jacket moved from a considered purchase to a deferred one and eventually to a purchase that simply stopped happening. The brand has genuine heritage and genuine quality. Neither is sufficient to insulate a mid-market fashion retailer from a consumer base that has had its discretionary spending capacity systematically reduced by 3 years of compound financial pressure.

[00:20:55]The country road customer is typically a professional with a mortgage. That demographic has absorbed the full force of the rate hiking cycle, $2,700 a year in extra repayments from the first quarter of 2026 alone, stacked on top of the increases from 2022 and 2023.

[00:21:14]The discretionary income that once covered a country road purchase or two each season has been redirected to mortgage, utilities, and food. The brand sales reflect that redirection with precision. Number one, Barbecues Galore.

[00:21:29]Barbecue Galore went into voluntary administration in early 2026 with 68 company-owned stores affected and approximately 500 employees facing uncertainty.

[00:21:42]Revenue in the financial year to June 2024 was $172 million. The pre-tax loss was $16.1 million. The administrators cited liquidity challenges and cash flow pressure. It is a specific story, but it is also a representative one. Barbac's Galore is a specialty retailer, a chain built around a product category that sits firmly in the discretionary spending bucket. When household budgets tighten to the point where people defer or eliminate non-essential purchases, the first thing to go is the new outdoor furniture setting, the new barbecue, the patio heater, and the pizza oven.

[00:22:23]Barbecues galore had been trading for decades across two countries. The brand had survived multiple downturns, the pandemic, and supply chain disruptions.

[00:22:32]A period of sustained household financial stress was the thing that finally broke it long enough and deep enough to push consumer spending on discretionary categories into territory that made the business model unworkable.

[00:22:44]The administration, the 68 stores, the financial year loss taken together, they describe a consumer whose behavior has changed in ways that look permanent and structural. The official GDP figures say Australia is growing. The GDP per person figures say the average Australian is getting poorer. The retail sector, from Barbcu's Galore's voluntary administration to Woolworth's trying to offload Big W, is saying something closer to the truth on the ground. The recession question that titles this list has a technical answer. Two consecutive quarters of negative GDP growth.

[00:23:20]Australia has avoided that technical definition so far. But recession is also a lived experience of businesses closing, of spending falling, of the familiar names on the high street disappearing one by one. The insolveny data sits alongside the retail data. In the year to November 2024, Australian business insolvenies were up 57% year-over-year. Liquidators have forecast total insolvencies for the 2025 financial year could reach 16,000, almost double the prepandemic average of 8,000 per year. The food and beverage sector alone saw 9.2% of businesses become insolvent in the 12 months to January 2025, the highest rate ever recorded for that sector. These are the numbers underneath the GDP headline and they paint a picture of an economy where the aggregate growth figure is being sustained by categories that are expanding, government spending, mining exports. While the parts of the economy that ordinary Australians interact with daily are under acute and accelerating stress. By that measure, the answer to whether recession is here depends on where you live, how much you owe, and which of the nine chains on this list used to be part of your daily routine.

[00:24:32]For our growing number of Australians, the answer to that last question is several of them. If you want to keep seeing this kind of coverage, joining the channel is the best way to help us continue. I will see you at the next