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Duty-Free Shops in Australia Industry Data and Analysis
The Duty-Free Shops industry has experienced a strong recovery from pandemic restrictions, which were detrimental to industry performance. Airport activity has revived and international travel, both to Australia and by Australian residents, has surged in recent years. Despite this rebound, profit margins remain negative, resulting from high fixed costs that persisted even as revenue collapsed during the pandemic’s peak. Shifts in domestic consumer behaviour, particularly declining per capita alcohol consumption, lower smoking rates and falling discretionary incomes, have contributed to softer demand from Australian residents. In response, duty-free retailers have increasingly targeted inbound international travellers, who tend to spend more, to compensate for weakened domestic sales and maintain overall industry growth. Moreover, rising excise taxes outside of duty-free shops have made duty-free purchases more attractive for those who still buy alcohol and tobacco products. Overall, revenue has climbed at a significant rate over the five years through 2025-26, albeit from a low base. Revenue is expected to grow at an annualised 26.0% per year over the period, to total $1.6 billion. This includes an increase of 4.4% during 2025-26, as the post-pandemic travel boom stabilises.
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What's included in this industry analysis
IBISWorld's research coverage on the Duty-Free Shops industry in Australia includes market sizing, forecasting, data and analysis from 2015-2030. The most recent publication was released August 2025.
About this industry
What's this industry report about?
The Duty-Free Shops industry in Australia operates under the ANZSIC industry code OD5605. Duty-free shops in Australia are retail shops, located primarily at airports, selling items like packaged alcoholic beverages, tobacco products, fragrances, skincare, cosmetics and electronics to eligible international travellers. Purchases made at these shops are exempt from Australian GST and certain excise duties, subject to quantity limits and customs regulations. Related terms covered in the Duty-Free Shops industry in Australia include excise tax, gst (goods and services tax) and duty-free allowance.
What's included in this industry?
Products and services covered in Duty-Free Shops industry in Australia include Skincare and fragrance products, Liquor and tobacco products and Electronic products.
What companies are included in this industry?
The Duty-Free Shops industry in Australia is highly fragmented with no companies holding a market share greater than 5%.
Performance
What's included in the Performance chapter?
The Performance chapter covers detailed analysis, datasets, detailed current performance, sources of volatility and an outlook with forecasts for the Duty-Free Shops industry in Australia.
Questions answered in this chapter include what's driving current industry performance, what influences industry volatility, how do successful businesses overcome volatility, what's driving the industry outlook. This analysis is supported with data and statistics on industry revenues, costs, profits, businesses and employees.
Products & Markets
What's included in the Products and Markets chapter?
The Products and Markets chapter covers detailed products and service segmentation and analysis of major markets for the for the Duty-Free Shops industry in Australia.
Questions answered in this chapter include how are the industry's products and services performing, what are innovations in industry products and services, what products or services do successful businesses offer and what's influencing demand from the industry's markets. This includes data and statistics on industry revenues by product and service segmentation and major markets.
Geographic Breakdown
What's included in the Geographic Breakdown chapter?
The Geographic Breakdown chapter covers detailed analysis and datasets on regional performance of the Duty-Free Shops industry in Australia.
Questions answered in this chapter include where are industry businesses located and how do businesses use location to their advantage. This includes data and statistics on industry revenues by location.
Competitive Forces
What's included in the Competitive Forces chapter?
The Competitive Forces chapter covers the concentration, barriers to entry and supplier and buyer profiles in the Duty-Free Shops industry in Australia. This includes data and statistics on industry market share concentration, barriers to entry, substitute products and buyer & supplier power.
Questions answered in this chapter include what impacts the industry's market share concentration, how do successful businesses handle concentration, what challenges do potential industry entrants face, how can potential entrants overcome barriers to entry, what are substitutes for industry services, how do successful businesses compete with substitutes and what power do buyers and suppliers have over the industry and how do successful businesses manage buyer & supplier power.
Companies
What's included in the Companies chapter?
The Companies chapter covers Key Takeaways, Market Share and Companies in the Duty-Free Shops industry in Australia. This includes data and analysis on companies operating in the industry that hold a market share greater than 5%.
Questions answered in this chapter include what companies have a meaningful market share and how each company is performing.
External Environment
What's included in the External Environment chapter?
The External Environment chapter covers Key Takeaways, External Drivers, Regulation & Policy and Assistance in the Duty-Free Shops industry in Australia. This includes data and statistics on factors impacting industry revenue such as economic indicators, regulation, policy and assistance programs.
Questions answered in this chapter include what demographic and macroeconomic factors impact the industry, what regulations impact the industry, what assistance is available to this industry.
Financial Benchmarks
What's included in the Financial Benchmarks chapter?
The Financial Benchmarks chapter covers Key Takeaways, Cost Structure, Financial Ratios, Valuation Multiples and Key Ratios in the Duty-Free Shops industry in Australia. This includes financial data and statistics on industry performance including key cost inputs, profitability, key financial ratios and enterprise value multiples.
Questions answered in this chapter include what trends impact industry costs and how financial ratios have changed overtime.
Industry Data
What's included in the Industry Data chapter?
The Industry Data chapter includes 10 years of historical data with 5 years of forecast data covering statistics like revenue, industry value add, establishments, enterprises, employment and wages in the Duty-Free Shops industry in Australia.
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Frequently Asked Questions
What is the market size of the Duty-Free Shops industry in Australia in 2026?
The market size of the Duty-Free Shops industry in Australia is $1.6bn in 2026.
How many businesses are there in the Duty-Free Shops industry in Australia in 2025?
There are 8 businesses in the Duty-Free Shops industry in Australia, which has declined at a CAGR of 6.2 % between 2020 and 2025.
Has the Duty-Free Shops industry in Australia grown or declined over the past 5 years?
The market size of the Duty-Free Shops industry in Australia has been growing at a CAGR of 26.0 % between 2020 and 2025.
What is the forecast growth of the Duty-Free Shops industry in Australia over the next 5 years?
Over the next five years, the Duty-Free Shops industry in Australia is expected to grow.
What does the Duty-Free Shops industry in Australia include?
Liquor and tobacco products and Skincare and fragrance products are part of the Duty-Free Shops industry in Australia.
How competitive is the Duty-Free Shops industry in Australia?
The level of competition is low and steady in the Duty-Free Shops industry in Australia.
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