Australian specialty retailers were the “standout performers” this year in relation to revenue growth, according to services firm BDO’s latest Spend Trend report.

In its research, BDO said specialty firms enjoyed a significant rise of 11.5 per cent compared to FY16, albeit at the cost of gross margin.

BDO said the prevalent theme among Australian retailers – of discounting in order to maintain market share at the cost of some margin – is in contrast to international counterparts who have been less keen to discount in order to maintain margins.

“Overall Australian retailers were able to achieve good revenue growth, but are still lagging behind the overall net profit margins and online sales of their international peers,” said BDO partner and retail specialist John Bresolin.

“They need to focus business strategies towards controlling costs, whilst maintaining market share.”

In the world of online, Australian retailers showed encouraging increases, with many recording significant double digit growth when online sales are expressed as a percentage of total revenue.

However, BDO said they still have a long way to go if they are to match their international counterparts such as Nordstrom, Next and Foot Locker, who’s online sales are in excess of 10 per cent of their total revenue. Most Australian retailers are only generating somewhere between 3 to 5 per cent of their revenue online.

“Much like last year, the lessons from 2017 are for retailers to remain agile, alert, embrace the change that is occurring and keep their customers top of mind.” Bresolin added.

BDO analysis also suggests that while Australian retailers have experienced an average 11.5 per cent increase in revenue, their net profit margins have dropped by 7.8 per cent. This contrasts to what’s been happening on the international stage. Global retailers have experienced a drop in revenue, but have been able to improve their gross profit margins.