New data from the Australian Taxation Office (ATO) reveals that foreign retailers Costco and Aldi collectively captured nearly A$20 billion in sales in fiscal 2025, intensifying competition for Australian-owned supermarkets and other domestic retailers. The figures highlight the growing influence of these international players on the country's retail sector, extending beyond groceries into household goods, hardware, fashion, and more.
Costco, the US warehouse retailer with 15 stores in Australia, reported sales of A$5.66 billion in 2025, up from A$5.15 billion the previous year, and paid A$39.8 million in tax. With around 100,000 members per store each paying a $65 annual fee, Costco is expanding its presence amid plans to open more locations by 2028. The German discount chain Aldi remains the larger competitor in Australia’s supermarket sector, operating approximately 600 stores and accounting for roughly 10 percent of that market. Aldi’s sales grew to A$13.97 billion in 2025, an increase from A$12.5 billion in 2024, with taxable income reported at A$683.15 million and tax payments of A$204.95 million.
Aldi, which entered the Australian market in 2001, has faced criticism over its corporate opacity but emphasized its contributions to the economy, citing employment of over 17,000 Australians and ongoing investment in stores and supply chains. A spokeswoman stated the company is committed to transparency and tax compliance, underscoring its role in delivering affordable prices to millions of households.
The rising market shares of these foreign retailers are impacting established Australian supermarket chains Coles and Woolworths, alongside independent operators such as IGA. The pressure is also evident in retail segments like Target, Kmart, Big W, and Bunnings, as Costco diversifies into new product categories. In response, Coles and Woolworths have broadened their product offerings and enhanced private-label ranges to better compete with Aldi’s known value-focused brand. Woolworths has claimed it has significantly narrowed the price gap with Aldi over the past year, with Coles making similar progress.
Shopping behavior is shifting amid cost-of-living pressures, encouraging consumers to seek out discount retailers. Research from investment bank Barrenjoey indicates shoppers have reduced dining out and are increasingly engaging in “cross-shopping” across multiple retailers, frequenting eight to nine stores weekly compared to three or four prior to 2022.
Despite Aldi’s continued growth, it has seen some loss of market share after recently scaling back its middle-aisle “special buys” to improve profitability. Costco’s relatively limited online presence also positions it at a disadvantage against Woolworths and Coles, which are investing in e-commerce and home delivery services.
Other foreign-owned retailers are making inroads into the $444 billion Australian retail sector as well. The ATO data shows that Ikea posted sales of A$1.78 billion in fiscal 2025; Japanese clothing retailer Uniqlo recorded A$833 million; Spanish fashion chain Zara reported just over A$400 million; and Swedish company H&M had A$360 million in sales, reflecting a broader trend of international brands expanding within Australia’s competitive retail landscape.