David Jones In-Store Foot Traffic Falls

Department chain David Jones posted its first slump in like-for-like store sales since it was bought out by South African group Woolworths Holdings in 2014.

In a trading update, the conglomerate sited weak Australian consumer confidence, as well as a decline in foot-traffic as reasons for David Jones’ 0.7 percent slump in comparable sales in the year to 25 June.

“Whilst relevant market share has grown, sales growth slowed in the second half (at David Jones), as falling consumer confidence resulted in lower footfall,” Woolworths Holdings said in a trading update on Friday.

It’s other Australian retail business, Country Road Group, also suffered a 0.4 percent fall in like-for-like sales, however saw an 5.1 percent upturn in overall sales, in Australian dollar terms.

The tepid results for David Jones and Country Road Group sees Woolworths Holdings warning its will see a 10 percent drop in full-year profits compared with the previous year.

Australia’s retail sector has been under pressure over the past 12 months, caused by increasing competition, aggressive discounting and a fall in consumer confidence that has weakened in-store sales.

David Jones’ foot traffic fall couldn’t come at a worse time with the retail chain set to launch phase one of its $100 million investment in food retail next month.

Last month the company unveiled its plans to target a growing generation of food-obsessed shoppers, making significant moves into gourmet food as part of its strategy to survive in the unsettling retail environment, by fusing leisure and shopping.

It’s part of David Jones’ strategy as Australian consumer behaviour is shifting to spending less on things and more on experiences and leisure. “Our customers are increasingly telling us they’re seeing retail as a leisure activity, a social activity, a place to meet and when I think about the future of the department store I see food as an important element,” David Jones chief executive, John Dixon, told us as he unveiled the department chain’s large investment into the gourmet food market.

David Jones has been busy working on ramping up its food offering by building a new flagship food hall at Sydney’s Bondi Junction, which will open on 3rd August. Its Market Street store will also see upgrades made, while its Elizabeth Street flagship store will see an enlarged food hall.

Next month DJs will also launch its summer collections, including new brands it has acquired since January this year.

While DJs food offering may appear sound, the fashion sector however isn’t, according IBISWorld – spending on fashion remains incredibly unstable, apart from few exceptions that sit at the very high end and in fast fashion.

Meanwhile David Jones rival Myer, also saw a fall in total sales of 3.3 percent (in its fiscal third quarter), which it says  reflects challenging trading conditions which were compounded by severe weather impacts in some areas around Australia. Myer is also facing trouble with a possible $10 million debt from the recent downfall of Topshop Australia, as a shareholder and and creditor of the fast fashion retailer.

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