David Jones and Myer face big challenges as they deal with lacklustre consumer demand in Australia, a shift in household spending away from merchandise to what the retailers call experiences – lattes instead of crockery, say, or a plane ticket instead of a new suitcase – and the expansion of internet retailing.
They are, however, making a pretty good fist of a task that many observers believed would be beyond them. The price gap between them and overseas online retailers is closing, and it seems it is doing so without creating a profit sinkhole.
Consumer sentiment is cyclical, and it has lifted since the federal election. Most of the challenges Myer and David Jones face are structural, however, and JPMorgan neatly summarised them this week in its review of David Jones’ flat AUD101.6 million (USD94.8m) profit for the year to the end of July.
(Source: The Sydney Morning Herald Online )