This study aims to analyze the impact of inflation on the performance of the Australian Retail Sector, with a case study of Woolworths. The study will shed light on the current inflationary effect on the retail sector's performance, considering factors like business profitability, Return on equity, earnings per share, and operational efficiency of the firm. The study will use secondary data from Woolworths' annual reports from 2000 to 2017 and perform ratio analysis to test the hypotheses. The study will help organizations understand the aspects that prevent them from applying their own strategies to sustain in this cutthroat market.