Myer prepares for flat Christmas
Myer boss Bernie Brookes is preparing for a worst-case scenario of a flat Christmas trading period despite six months of comparative sales growth for the department store and a recent cut in official interest rates.
Mr Brookes said on Thursday that the Australian consumer was still feeling fragile due to continued concerns over Europe's economic crisis and fears about a rise in local unemployment. Myer had placed forward product orders for a flat Christmas this year, he said.
However, the department store, which on Thursday posted its second consecutive quarter of same-store sales growth, had the ability to quickly ship in extra stock in the last few days before Christmas if the shopping season proved stronger than anticipated, Mr Brookes said.
"We feel very comfortable that if it turns out to be a more positive Christmas then we will be able to cater for it because of our supply chain."
The main threat to Myer's trading for Christmas and the new year clearance sales remained the fragile nature of the average Australian consumer.
"I think we are being cautious. The last thing you want to do is buy a whole lot of stock and then end up marking it down for Christmas and you do your profits; we are going to be cautious," Mr Brookes said.
"Who knows what is going to happen in terms of the fiscal cliff [in the United States], the implications of Greece and the debt they have ... the [Australian] consumer is reasonably fragile and we can't afford to be too buoyant.
"We are looking for Christmas to be at least flat, maybe better, and have bought stock on that basis and done our planning on that basis."
Myer, Australia's largest department store chain, on Thursday morning reported better-than-expected sales of $688 million in the 13 weeks to October 27, as warm spring weather encouraged summer clothing purchases and the retailer offered smaller discounts on sale items.
Total sales were up 1 per cent, while like-for-like or comparable store sales growth was up 0.8 per cent.
It was the second consecutive quarter of comparable, or same-store, sales growth and the first increase in total sales since the first quarter of 2010, when Myer was floated on the Australian Securities Exchange.
Following the global financial crisis and the downturn in consumer spending, Myer hasn't produced a quarter where total and comparable store sales increased since the first quarter of 2010.
Mr Brookes said the trading environment during the first quarter of 2012 had been difficult, but there had been a modest improvement in consumer sentiment.
"While we welcomed the October interest rate cut, there are myriad factors currently in the mix and influencing discretionary spend, so we continue to be cautious about the trading environment," he said.
To grab a greater slice of the growing online retail market, Myer had beefed up its website to now have 40,000 lines and was adding to it as quickly as photos of products could be taken and put up online, Mr Brookes said.
Myer would also launch special online events and sales in the lead up to Christmas. It will be part of next Tuesday's Click Frenzy, a nationwide online sale being backed by hundreds of retailers.
The timing of shipping products to consumers before Christmas would also be improved this year.
"We have extended the date at which you can buy online for Christmas to the 17th of December and still get it to you for Christmas, so we are getting better and better in this in every avenue."