Retail kings Myer and David Jones are begging for no future interest hikes as they scavenge for ‘green shoots’ amid an otherwise dreary retail sector.Both high street retail houses have witnessed declining sales in the most recent quarter.
Myer sales figures saw it dip 2 per cent to the end of April to $657 million compared to a year ago, while its neighbour David Jones figures, announced today, also told a similar story, sliding 1.4 per cent to $411.7 million compared to Q3 last year.
DJ’s admitted it faced ‘”challenging” trading conditions in the first months of the year, aggrevated further by strong discounting by retailers as it looked to turn around cautious consumer spending and warned any rates hike would have a further negative impact on trading.
“I wouldn’t see it as a positive. We’ve seen four increases in the last year. But ultimately it does hit home,” David Jones chief Paul Zahra warned.
Myer Chief, Bernie Brookes, and David Jones have both also blamed price deflation in the electrical goods sector in particular, with the former downgrading its profit forecasts for the year by up to 5 per cent.
However, Brookes has spotted “a couple of green shoots coming through,” although thinks “a couple of them will curl when there’s an interest rate increase,” in a thinly veiled warning to the Reserve.
And David Jones chief Zahra, was keeping the bright side out also, noting the high end retailer had been buoyed by better April trading.
“I think customers are remaining value conscious. April saw colder weather and that has matched what our offer had been in store. We had a later Easter which is good for retail anyway,” said the clothing chief .
Calling the winter season fashion “one of the best we’ve had “Zahra pointed to “discerning trends within the fashion portfolio” as helping to lift sales, he added.