Sydney currently has the world's second most expensive prime retail rents behind NYC. This, however, is more a reflection on the fact Sydney has about 200m worth of "prime" shopping strip (Pitt St Mall), whereas most other cities have much longer strips and hence more supply drives the price down relative to Sydney, where supply is lagging way behind demand in the prime category. Also, "Australia's CBD retail markets are very concentrated and retailers can generate more turnover per square metre, which provides an offset to higher rents" - so in effect the higher rents should not necessarily translate into higher prices for the customer. Also, the rankings are based on US dollar values, so at the moment Australia seems "overpriced" by world standards (Brisbane ranked ninth, Melb 10th in the world for cost of prime retail space - ahead of LA, Singapore and most European cities). For an Australian company, the rise in rental costs in $A would be less than it has been when measured in USD over the past 24 months. All this aside, the headline-grabbing data only talks about what is globally defined as "prime" retail space - the best you can get on an international scale (for Syd, Pitt St mall; for NYC, 5th Avenue, etc.) This type of space is unlikely to be occupied by Australian retailers, more likely by Gucci or Zara etc. "Street" Shop rents are much more competitive in Sydney and have been going nowhere in the last 12 months; e.g. HK "street" shop rents are well over twice as expensive as Sydney.... In sum, I'm not sure higher rents is really an excuse for such huge markups on clothing as we see in Australia, and wages in retail here would be higher than the US, but my feeling is Europe would be as expensive in terms of the minimum wage for these types of workers. Its not just clothes. Whilst Australia has a relatively small population compared to say USA/UK or even California, what we do have is great concentrations of population - that is - on the east coast at least - Melbourne Sydney, Brisbane and even (Newcastle, Bendigo, Ballarat etc) have larger populations than many major cities through out the world. Plus our economy is one of the healthier ones in the world.