Australia Retail Bags Market Size

Australia Retail Bags Market Analysis

The Australian retail bags market was estimated to be around USD 1,391.6 million in the previous year. The market is expected to reach USD 1,842.0 million over the forecast period, registering a CAGR of 4.92%. Retail bags can be made from paper, natural fabric, and plastic (HDPE, LDPE, PP, rPET, etc.) Due to rising customer and brand demand for eco-friendly goods, paper and natural fabric are being used more frequently as packaging.

• Australia's consumer demand for retail bags has significantly been fueled by the quickly rising number of shopping centers, supermarkets, and developed retail sectors. Owing to expanding retail sectors connected to customers' increased preference for eco-friendly packaging, the market for retail bags is expanding dramatically. Bags of different formats have assisted consumers in shopping for goods for the past few decades. Consumers often choose single-use retail bags in supermarkets in developed countries, which are considered major plastic use areas.
• Retail stores have also opted for unit bags for small purchases and offer their customers paper and natural fiber bags. The increasing online expenditure by Australians on homeware and appliances, department stores, grocery and liquor, personal and recreational, fashion, and takeaway food is expected to support market demand. According to the Australian Bureau of Statistics, the homeware and appliances category accounted for about 21.3% whereas, department stores, grocery, liquor, fashion, and takeaway food accounted for 17.10%, 15.60%, 10.70%, and 7.90%, respectively.
• Moreover, the market is supported by the increased spending on clothing, footwear, and personal accessory, as these sectors also utilize unit packaging for product packing. As per the Australian Bureau of Statistics, the annual revenue generated from the above products reached AUD 34.73 billion (~USD 23.21 billion) in 2022 from AUD 28.1 billion (~USD 18.8 billion) the year before.
• Factors such as the region's rising income levels and living standards have increased the demand for retail bags. The advent of biodegradable bags (paper) has dramatically aided businesses in meeting the need for environment-friendly products. Furthermore, companies are incorporating recyclable (recyclable pulp) materials to lower their carbon footprint by manufacturing unit-size retail bags, such as paper and natural fibers.
• This price volatility could potentially impact manufacturers of retail bags who rely on mechanical wood pulp as a raw material. If the price of mechanical wood pulp increases, it could lead to a rise in the cost of production for manufacturers of retail bags. As a result, these manufacturers may have to increase the prices of their bags to maintain their profit margins, which could potentially impact demand, causing them to look for other solutions/substitutes, such as cotton bags, jute bags, and hemp bags.
• During the COVID-19 pandemic, the grocery sector witnessed an increase in demand for paper bags as more consumers opted for home delivery or click-and-collect services due to the pandemic. This increased demand for paper bags used for grocery delivery and pickup orders.