The Myer Holdings Ltd (ASX: MYR) share price dropped 3.15% to close at $0.77c on Wednesday as retailers took hits.
Harvey Norman Holdings Limited (ASX: HVN) dropped 3.76%, JB Hi-Fi Limited (ASX: JBH) was down 0.61% and Woolworths Limited (ASX: WOW) lost 1.84%.
And although the Christmas period is approaching, it seems retailers have little to celebrate.
Amazon is gearing up to provide the retailers with tough competition and fallout from the so-called 'Amazon Effect' is chilling confidence in the sector.
And with Toys "R" Us last month filing for bankruptcy it is clear even the biggest retailers are not immune from the Amazon effect.
Adding to the retailers' woes, low wage growth in Australia will not help raise profits anytime soon.
Earlier this year, Deloitte warned of the imminent arrival of Amazon and the challenges it would bring for existing retailers.
"Prices will get squeezed as Amazon has so much scale to absorb very low margins in most of its products," Deloitte announced.
"The bigger the retailer, the more a threat Amazon's entry will be.
"But on the other hand, small players have a chance to thrive by leveraging Amazon's role as a consolidated marketplace."
Australian retailers have already taken a hit and Amazon's August unveiling of its Melbourne warehouse plan was more than just more bad news. Amazon is cementing its future in Australia.
But it seems there may be some challenges ahead for Amazon as governments set new precedents on how to deal with the online retail giant.
The European Union has ordered Amazon.com Inc to pay almost US$300 million in back taxes.
As the EU cracks down on Amazon, other countries will be looking at how they may review their dealings with the e-tail monster.
And if crackdowns on Amazon's tax strategy gain enough momentum, perhaps the online giant my not be such a fearsome competitor as many in Australia's retail sector have been led to believe.
Still, investing in Australia's big retailers in the current climate is not for the faint hearted.
