Australia's privacy commission has warned retailers against assuming they have general approval to use facial recognition technology, the Australian Financial Review (AFR) reported.

The warning follows revelations that Coles and Woolworths have each carried out preliminary trials of the tool in their stores.

The supermarket chains ran the trials as part of measures to address escalating crime and violent incidents on their premises.

Both retailers stated that no final decisions had been made regarding a wider rollout, though the revelation has renewed scrutiny around privacy concerns tied to major retail chains.

A spokeswoman for the Office of the Australian Information Commissioner (OAIC) told the AFR that the Privacy Act imposes stringent requirements around the collection of sensitive data, pointing out that using facial recognition systems, even briefly, requires customer consent unless a specific exemption applies.

Referencing an earlier ruling concerning hardware chain Bunnings, she said the Administrative Review Tribunal's decision had taken into account the “serious problem of violence and theft affecting Bunnings, arising from the nature of its stores and the products they sell, some of which can potentially be used as weapons”.

She added that the ruling “should not be read as a green light for all retail facial recognition technology deployments”.

Bunnings and Kmart were earlier found by the OAIC to have violated customer privacy through their respective use of the technology.

Bunnings successfully challenged that finding on appeal this year, leading the regulator to revise its guidance to allow limited use of facial recognition.

Kmart's matter is due to be heard by the Administrative Review Tribunal in early 2027.

Bunnings plans to reintroduce the technology across its network of more than 300 Australian outlets early next year.

Australian Attorney-General Michelle Rowland indicated she might explore new regulations on facial recognition ahead of a broader review of national privacy legislation, citing rising public unease.

Shadow Attorney-General Michaelia Cash urged the government to introduce clearer legislation on the matter and improve coordination with state authorities.