More sales misery for department stores Myer, DJs

Jane Harper
November 06, 2012
Herald Sun

THE nation’s department stores have suffered their biggest quarterly slide in sales for seven years as their run of misery continues.

Spending in department stores fell 3.6 per cent in the three months to September in real terms, which strips out the impact of inflation.

The fall was the biggest since June 2005, according to latest Australian Bureau of Statistics figures. It reflects a volatile quarter for department stores, which saw spending plunge 10.2 per cent in July, before rebounding 6.9 per cent in August and sliding 0.5 per cent in September.

David Jones’ share price fell 4.2 per cent yesterday, its biggest one-day drop since August to close at $2.49, while Myer shares fell 1.5 per cent to $1.91.

But across the broader retail sector, there was an upturn in spending figures, echoing commentary by some retail leaders who have suggested there are signs of a tentative recovery in consumer confidence.

Retail turnover increased 0.5 per cent in September, compared with a month earlier, to $21.59 billion.

It follows a rise of 0.3 per cent in August.

The improvement still fell slightly short of economists’ expectations of a 0.6 per cent rise, but was welcomed by leading lobby groups in the retail industry.

Australian National Retailers Association chief Margy Osmond said the figures gave hope for a stronger Christmas.

Ms Osmond said it was also a particularly good result for a month without a cut in the official cash rate or government stimulus.
The figures pre-date the interest rate cut last month, which was the first change to the cash rate since June.

“The season’s first month has certainly been a winning one for the retail sector,” Ms Osmond said.

But Australian Retailers Association executive director Russell Zimmerman said retailers still needed reforms to the tax-free threshold for overseas goods and the high weekend penalty rates.

“The ARA is also calling on the Reserve Bank to cut rates this month in order to boost consumer confidence in the lead up to the festive season,” he said.

The largest contributors to the rise in spending were food retailing, up 0.6 per cent, and household goods, up 1.2 per cent.

Cafes, restaurants and takeaway food services recorded a 0.5 per cent boost.

Clothing, footwear and personal accessory retailing was down 0.6 per cent.

Spending in Victoria was up 0.3 per cent.