Data shows winners and losers

Global retailers entering the Australian market in the past couple of years, such as Zara and Topshop, have arrived with great fanfare, and their opening-day queues suggest local fashionistas are embracing them enthusiastically.

Now, an examination of debit and credit card spending data, conducted by retail analysts Andrew McLennan and Sam Teeger at the Commonwealth Bank, has provided some insight into just how popular the new entrants are.

The data is also putting some colour around which kinds of retailers are losing traction as a result - and there are few surprises.

The CBA analysts looked at the spending patterns of 3.5 million consumers at 135 fashion retailers, which they divided into nine categories based on product mix and price point.

They found that two of the nine categories - pure play online retailers and new international players - were sprinting ahead of the overall market.

In the six months to September 2012, pure plays had enjoyed year-on-year sales growth of 42 per cent while the internationals had experienced 32 per cent growth.

And despite the fact that fashion retail has been in the throes of a weak recovery in recent months, it has not been enough to buoy everyone. High-end fashion was doing OK but low and middle-market apparel were going backwards.

The CBA report confirmed one other important thesis as well - that members of the under-30 age group are responsible for more than 50 per cent of fashion spending; these consumers are really the motor for sales at the global retailers.

Although CBA did not include department stores and discount department stores in its analysis, the meaning of the data should not be lost on them.

Put bluntly, the mid-market jack-of-all-trades fashion retailers that clothed baby boomers and Gen-Xers now have a bleak future unless they both downsize and reposition. Their loudly trumpeted strategy of shifting sales online is a fine one for protecting short-term market share. In the long run they will have to be downsized or repositioned.

But this requires leadership that is not so invested in the fiction of growth that it can make some bold moves.

The store counts for at least three of Australia's biggest chains - Myer, David Jones and Target - look way too high for market demand either now or in the future.