Australia’s fashion industry has slid into a discount and die state, driven by a permanent-sale scenario that nobody wins. November’s Black Friday/Cyber Monday promotions now dominate the end-of-year sales results, pulling customer spending out of December, squeezing retailer margins, and distorting inventory planning.
This unsustainable model impacts businesses in the retail industry, its consumers, and the nation’s overall sustainability efforts.
On the other side of the globe, countries like France take the opposite approach: two tightly regulated sale windows and a general ban on selling at a loss. New laws have also been introduced to penalise ultra-fast fashion disposal and curb its advertising.
If the US is any indication of the scale effects of cyber sales, Cyber Monday 2024 alone hit US$13.3 billion online, amplifying discount anchoring and costly returns. We are yet to see the impact of tariffs on the next cyber sales period in the USA with sales starting in the next few weeks.
In this discussion, we will look into the discount models and how they impact the retail sector in Australia.
Discounting as survival
Over the past five years, discounting has become the default demand lever in the Australian retail sector. Monthly ABS releases now consistently flag Black Friday as the key driver of November sales, followed by a December retail slowdown as consumers bring forward purchases to chase deals.
In 2024, retail turnover rose 0.8% in November due to widespread discounting, with the ABS explicitly attributing the jump to Black Friday events. This shift in seasonality has been documented and dubbed as “Black November.”
From a margin perspective, this is a double-edged sword. Promotions move stock but compress gross margins and condition consumers to wait for discounts. It is a scenario that’s harmful for price realisation, planning, and cash-flow smoothing.
The RBA’s liaison notes reinforce this, claiming that retailers report customers delaying purchases until items go on sale, and that discounting/promotions are driving what little growth there is in discretionary categories.
Economically, persistent discounting:
- Erodes pricing power (by lower long-run mark-ups), making fixed-cost recovery harder for bricks-and-mortar operators.
- Shifts demand timing (i.e. November spike/December dip), disrupting labour rostering and inventory turns.
- Raises return costs, particularly online. US benchmarks show total retail return rates are around 14–15% (higher for apparel/online), deepening the costs for Australian e-commerce retailers.
- Causes social spillovers such as staff pressure around compressed sale peaks, and a culture of over-buying that feeds waste streams and undermines circularity goals.
An always-on discount equilibrium is economically fragile. It suppresses unit margins, lifts return/logistics costs and pushes retailers to chase volumes that rarely scale enough in Australia’s smaller market. The ABS-observed November pull-forward/December slump is a visible symptom of distorted demand timing that complicates staffing and inventory.
But the cost isn’t just economic, it’s environmental.
The sustainability impact of discounts
Australians buy 56 new items of clothing per person each year on average. We also dispose around 200,000 tonnes of clothing annually to landfill. These numbers are among the highest rates globally and are backed by data from industry and government bodies.
By contrast to Australia, the EU reports over 19 kg of textiles (clothing, footwear, household textiles) consumed per person in 2022. Although these numbers are rising, they are still materially below Australia’s unit-based tally.
Chronic over-consumption has a broader effect. It strains charities and municipal systems (through sorting, export leakages, and landfill disposal), while retail workers shoulder demand spikes during sales cycles and the operational burden of returns and markdowns.
The European Environment Agency states that textiles are among the top four European consumption categories in terms of life-cycle environmental pressure (after food, housing, and mobility). The message suggests that high textile output imposes countries with outsized resource, emissions, and waste burdens even before end-of-life handling is considered.
The high per-capita textile purchase rates give rise to a large, steady waste pipeline, which is incompatible with ‘circularity’ targets without strong prevention. The EU’s evidence on the environmental burden of textiles underlines why volume control—not just recycling—matters.
Australia has begun to respond with sustainability efforts via Seamless, the industry-led national clothing stewardship initiative launched in 2024. The scheme is currently proposing a 4c-per-garment levy to fund better design, reuse, collection, sorting, and recycling.
The French approach limits discounts
In France, discount policies rely on curated promotions, price integrity, and anti-waste rules. France restricts deep discounting to two, four-week soldes (sales) windows per year (winter/summer), with nationally set dates. Outside these windows, promotions are allowed, but there’s a general ban on resale at a loss (revente à perte), which preserves price integrity and dampens permanent markdown wars.
On sustainability, France already prohibits the destruction of unsold non-food goods (including textiles) under its anti-waste law, forcing brands to prioritise donation, reuse, or recycling pathways.
In 2024–25, France went further: a bill progressed to penalise ultra-fast fashion, with charges rising up to €10 per item by 2030. The country also introduced a ban on related advertising, with Senate approval in June 2025 and pending final reconciliation to follow. The intent is to internalise environmental issues and curb volume-led “disposable fashion”.
By anchoring discounting to fixed windows and tightening environmental obligations, France seeks to stabilise margins and reduce overproduction, accepting slightly lower short-term volumes in exchange for more resilient retail economics and lower waste.
Understanding the US discount and waste trajectory
In the US, the Cyber Week period has grown enormously. Cyber Monday 2024 set a record of US$13.3 billion in online sales, while Black Friday reached roughly US$10.8 billion in online sales.
The results of consumer anchoring to deals are a powerful phenomenon. Combined with high online return rates and frequent Buy Now Pay Later scheme usage, the system scales volume but also scales costs (reverse logistics, markdowns, fraud/returns management).
The lesson for Australia is that chasing US-style volume without its market scale risks a race to the bottom on prices with thinner margins and higher waste.
What we want to see
To ensure sustainability (both in operations and environments), sound rules must be adopted for discounts. An equitable model suggests the following practices:
- Shift from blanket markdowns to precision pricing with fewer, better promotions. Introduce member-first offers and clear price integrity to rebuild consumers’ reference prices
- Inventory discipline through shortened buy cycles, as well as test-and-replenish to avoid deep end-of-season clears using AI.
- Returns prevention with accurate sizing/fit tools, better product content, and small return fees or extended exchange credits to curb free-cycling behaviours.
- Practice circular models, such as investing in repair, rental, and authenticated resale, thereby capturing value without chasing volume.
Key takeaway
Australia’s retail sector has drifted into a high-discount, high-throughput process that undermines margins and multiplies waste. France, however, demonstrates that rules on sales windows, price integrity, and anti-waste obligations can help restore sustainable economics while tackling externalities.
In Australia, our relatively smaller market size does not allow us to absorb the cyber sale scale costs.
Given Australia’s world-leading per-capita fashion consumption and rising dependence on November mega-sales, the sector’s long-run health will hinge on re-anchoring price expectations and investing in circular inventory models. Shifting from “more, cheaper, faster” to “fewer, better, longer” is not just environmentally prudent – it’s financially necessary for a resilient Australian retail ecosystem.
If you’re a fashion retailer or e-commerce brand looking to maximise your sale value, reduce inventory loss, and improve the longevity of your operations, speak to our team at Olvera Advisors today.
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