Myer all out to chase sales
Department store Myer will switch its focus from relentless cost-cutting to driving sales growth and grabbing a greater slice of the discretionary spend by shoppers.
The nation's biggest department store will hold a "Super Saturday" stocktake sale this weekend to pump up sales and shift an overhang of stock held by some of its suppliers.
It will use the occasion to remind budget-conscious shoppers of its offers ahead of an expected price war with ailing rival Target.
Myer chief executive Bernie Brookes, who unveiled the fourth consecutive quarterly rise in same-store sales growth for the first time since 2010, warned of a downturn in consumer confidence since the release of the budget earlier this month, with shoppers "less interested in spending".
"This is not a heyday for discretionary retailers ... it's still very patchy and inconsistent and there is no sign of significant turnaround in consumer sentiment," Mr Brookes said as Myer reported only a minor improvement in sales for the third quarter, up 0.5 per cent to $652.5 million.
Although the quarter was relatively flat, with comparable store sales up 0.4 per cent, Myer did manage to stitch together four quarters of sales growth and is possibly on track to record its first full financial year of sales gains since 2007.
"It's a good sign, it reflects the fact that we're getting the benefit out of all the investment we've made in the last couple of years - we're pleased but certainly not contented," Mr Brookes said.
Consumer sentiment remains in the doldrums, witnessed by the latest Westpac-Melbourne Institute confidence index dropping 7 per cent in May.
It comes as Target last week issued a profit downgrade and could clear as much as $100 million in unwanted stock, placing further pressure on discretionary retailers such as Myer, Big W, David Jones and other chains as a fresh margin-pinching price war looms.
Mr Brookes said if Target pulled the trigger on discounting it should dodge the worst of the competitive threat because Myer played in a different fashion sector, but it would remain competitive.
"The pleasing part for us is that it will coincide with our very aggressive stocktake sale, which will make sure we're still in play in an active way over the course of the next couple of months," he said.
This was part of a fresh strategy to drive sales growth after years of cost-cutting and investing in IT, refurbishment and staff.
When Myer floated in 2009 it had annual sales of $3 billion. Sales in 2011-12 were $3.12 billion. Myer shares closed down 9¢ at $2.68 on Monday.