Department stores have copped a blow to sales during July following 'stagnant' results across the sector.
The Australian Bureau of Statistics (ABS) recorded a -3.8% year-on-year growth for department stores while the overall retail sector grew 2.7% for the month.
The Australian Retailers Association (ARA) executive director Russell Zimmerman believes a range of factors including discounting and consumer confidence have contributed to the dip.
“There are many factors that feed into this result, with economic uncertainty and low consumer confidence chief among these.
“By July, mid-season sales have also slowed down, with many retail businesses having focused their discounting activities in June in an effort to prop up sales in the face of unseasonably warm winter temperatures.”
Zimmerman also expressed concerns for discount department stores.
“Department stores have been experiencing a volatile period in the last few years, and this major downturn is a blow to the sector.
“While some department store chains have seen steady gains thanks to restructuring and turnaround programs in recent months I suspect some of this result can be attributed to the highly publicised changes taking place at Target and Big W.
“There is strong evidence of discounting in the lower end of the market due to Big W and Target inventory writedowns.”
In good news for fashion retailers, the clothing, fashion and personal accessories sub-sector grew 6% year-on-year during July.
Total Australian retail sales during the month hit $25 billion.