The onslaught continues: Japan's Uniqlo plans to triple its stores in Australia. Credit:Uniqlo Zara's Australian results for last year show revenue topping $221 million and net profit of $15.3 million, compared with the Spanish clothing chain's first year here in 2012, when it recorded sales of about $68 million and net profit of $9.4 million. The likes of H&M, Zara and Topshop have received the lion's share of attention so far, but others that have only opened a few scout stores to date are set to explode their number of outlets. Let's take Daiso, the Japanese funky but well priced homewares outfit, which has 18 outlets but is planning to get to 50 Australian stores. Or Uniqlo which plans to triple its stores to 30. Then there is the store that few would be familiar with - the South African based budget apparel group Mr Price, which has two stores on the ground now but it targeting 100.

The better known Victoria's Secret has been a feature on the Australian landscape for years, but now plans to boost its presence from 18 to 50. Of the higher profile international brands, H&M will increase from nine stores to 40, Topshop from four to 20, Zara will increase its store numbers by 30 per cent and GAP will boost numbers more than fourfold to 25 stores. Pressure on prices The increase in competition that these international retailers have triggered has played a reasonable part in the weak price inflation we have seen over the past few years, as established local players have needed to use lower prices to either maintain their market share, or limit their losses. This view is consistent with that of the Reserve Bank, which in a paper published last week looked into "Why has retail inflation been so low?"

It concluded that intensifying competition, "in part driven by foreign entrants, has compressed gross margins, and firms have sought cost reductions, including through labour productivity gains, to maintain profitability." According to research from Macquarie Wealth Management, international retailers account for only 1 per cent of the nation's combined clothing and department store sales. But clearly, as their stores increasingly populate our malls, their market share will grow. And more importantly, their impact has been far more significant because they have forced local players to ratchet down prices . The increase in competition has made it far more difficult for the rest of the industry to grow or even retain their profit margins. International players have had an impact across the board, but it has probably been felt more keenly by the discount department store group operating in the more price-conscious segment.

Indeed the new head of Target, Guy Russo, suggested that in his attempt to revive the ailing brand he would be going head to head with the likes of Zara and H&M. But the higher-end department stores are not immune. Over the past five years, both David Jones and Myer have sustained market share losses. Macquarie research says the cumulative market shares from these department stores have fallen from 15 per cent at the tail end of 2008 to 13 per cent in 2016. David Jones has fared better than the more middle market Myer. Similarly, the market shares of the discount department stores have also fallen a couple of percentage points from 2009 - with only Kmart improving its position, according to a Macquarie report.