Australians are apparently getting weary of the constant round of storewide sales, discounts and special offers.
Experienced shoppers shoppers would, in the past, save their energy and resources for end of year and Boxing day sales. Now there seems to be a new sales campaign every month.
Myer today released its half year results, showing a good lift in profit as the department store slices costs and improves productivity but disappointing sales numbers.
CEO Richard Umbers described the half year comparable store sales growth of 0.3% as “modest”.
Revenue was flat, down just 0.5%, at $1.78 billion. And sales in the second quarter were down 1.3% to $1.06 billion, slipping 0.5% on a comparable store basis.
Myer has a target of 3% sales growth between 2016 and 2020.
Umbers says sales were encouraging during the Spring racing season and, unlike a lot of other retailers, Christmas.
However, the stocktake sale was subdued, the key reason why comparable store sales growth for the half was only in the modest range.
“Sales performance during the stocktake sale was influenced by both our own strategy of reducing markdown dependency and the emergence of widespread discount fatigue among consumers,” says Umbers.
However, the modest sales performance combined with a continued improvement in costs led to a 5.3% increase in net profit after tax to $62.8 million.
“The improved profit result was achieved against a backdrop of aggressive competition with heavy discounting both before and after Christmas and patchy consumer confidence,” says Umbers.
He still has a rosy outlook.
“We are 18 months into our five year transformation and I am pleased with the progress we have made. We are a better and stronger company as a result of the New Myer strategy,” says Umbers.