Melbourne’s CBD retail sector is experiencing a remarkable recovery in 2026, with shopfront vacancy rates nearly halving over the past two years and spending in December 2025 reaching the highest levels ever recorded, signaling a resurgence of confidence in the city’s central business district and surrounding precincts [citation:11]. The City of Melbourne’s latest Economy Snapshot reveals that retail vacancy rates across the municipality have fallen dramatically, with reactivated shopfronts up 13.5 percent as more businesses reopen or move into the CBD [citation:11]. This represents a significant turnaround from the pandemic-era challenges that left many retail spaces empty and the city’s commercial heart struggling to recover from the disruption of lockdowns and remote work patterns. The retail and hospitality sectors are expanding, with new venues and retailers creating almost 6,400 jobs across the local economy, providing employment opportunities that support household incomes and community wellbeing [citation:11]. Shoppers are returning to the city in significant numbers, with foot traffic on Bourke Street Mall up nearly 40 percent in 2025, indicating growing consumer confidence and the enduring appeal of Melbourne’s CBD shopping precincts [citation:11]. Spending surged over the summer season, with eight days in November and December 2024 exceeding $40 million in spending, demonstrating the strength of consumer activity during the peak retail period [citation:11]. The Economy Snapshot reveals that Melbourne’s CBD Shopping Precinct remains the number one choice for international and domestic overnight visitors, racing ahead of Victoria’s many other popular hotspots and cementing the city’s status as the state’s premier shopping destination [citation:11]. Queen Victoria Market has also emerged as a significant drawcard, taking out second spot for international visitors and demonstrating the enduring appeal of this iconic Melbourne institution [citation:11]. With Melbourne being the hottest spot for shopping in the state, more and more people are setting up business here, with the Business Concierge service, the largest of its kind in the country, engaging with tens of thousands of clients and contributing millions to the local economy [citation:11]. The Economy Snapshot data shows that Melbourne is the number one city for the most interstate spend and visitors in Australia, with millennials emerging as the biggest spenders in the thriving city, while visitors aged over 65 are on the rise and spending more per transaction [citation:11]. Twilight trade between 5pm and 10pm is thriving, with the Winter Night Market flourishing and the surrounding precinct busier than it has ever been, demonstrating the strength of Melbourne’s evening economy [citation:11]. Queen Victoria Market is going from strength to strength, with activity increasing across the week and Saturday now the busiest day, reflecting the market’s appeal to both locals and visitors [citation:11]. Melbourne now has the lowest CBD retail vacancy rate in the country, a remarkable achievement that reflects the effectiveness of strategies to revitalise the city centre and attract businesses and shoppers back to the heart of the city [citation:11]. Monday commuter traffic at Flinders Street Station and spending on dining in the CBD East have skyrocketed, indicating that the return of office workers is supporting the recovery of businesses catering to the weekday workforce [citation:11]. Retail and hospitality industries are thriving, with total employment increasing by 6 percent compared to the previous year, demonstrating the resilience and growth of these critical sectors [citation:11]. The City of Melbourne’s Economic Development Strategy 2031 highlights that the economy is up by almost five percent to $114 billion, jobs are on the rise, and shopfront vacancies have more than halved, painting a picture of a city economy that has not only recovered but is thriving [citation:11]. Melbourne continues to attract major drawcard events that boost night-time activity and spending across the city, with Docklands beating records during the 2023 festive period and AFL fans increasing spending in Docklands by up to 30 percent on game days [citation:11]. International travellers are flocking to the city and visitor spend is increasing significantly, while more people are calling Melbourne home, spending, working and investing in the local economy [citation:11]. The city’s capacity as a smart place to do business continues to grow as the knowledge economy thrives, with dog registrations increasing by 81 percent, presenting opportunities to engage in the lucrative pet-care industry [citation:11]. As Melbourne’s CBD retail recovery continues, the city’s economy demonstrates remarkable resilience and adaptability, positioning Melbourne as a dynamic and attractive destination for business, investment, and commerce.
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