While the Australian recession will get worse, we will continue to suffer and the retailers are not an exception. Some figures yesterday from ABS showed retail sales fell 2 percent in February. Normally the retail market has a poor performance in February but this year the performance is worse due to tough economic conditions. And the sector that shrank the most is the clothing retail.
Myer, the biggest department store chain in Australia, reported a 2.5 per cent drop in sales in February and March whereas David Jones experienced a 6.4 per cent fall in sales for the first half of the financial year ending in late January. Without regard to the economic crisis, February is a trans-seasonal month because it is right after the January sales. Moreover, the weather is still hot and people, especially women shoppers, don't need to spend more money to update their wardrobe for winter.
The executives expect that their shop's sales figures will be flourishing on late March and April thanks to the cooler weather and especially to the government's second economic stimulus package. This second round of the package will stimulate the buyers' purchasing power; therefore, the shops have to try their best to make use of this opportunity. Myer decided to ramp up its advertising. Others are carrying out their price offer and in-store activities.
How's about the winner in retail market? Probably JB Hi-Fi, one of the biggest electronics retailer. Managing director Richard Uechtritz said that its stores are trading well because even though times are tough people still spend on home entertainment, such as game, DVDs, laptops and so forth. Likewise, the OZ biggest beverage retail Lion Nathan are performing well during the economic storm, which seemingly does not have a considerable impact on the beer market.We all know that beer is terribly inelastic hehe.
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