Retailers, including department store Myer and shopping centre landlords, are holding crisis talks this week to discuss how to deal with unseasonably warm weather that has left them struggling to move winter stock.
In the past three years, end-of-financial-year discounting has started on June 1, but with warm weather in NSW and Victoria beating May records, sale signs are already in shop windows.
For some retailers, especially those reliant on the snow season, a sale sign may be seen as a white flag. Photo: Luis Enrique Ascui
For some retailers, especially those reliant on the snow season, a sale sign may be seen as a white flag.
Malls are also suffering as shoppers choose to stay outdoors to enjoy the sunshine instead of seeking shelter in a warm shop or cinema.
Retail's bout of sunstroke comes amid pressure on other fronts, including internet shopping and new international fashion and homewares brands.
Landlords have been hit by flat to negative rents, particularly in contracts being offered to new tenants.
A saving grace has been the booming residential sector, which has helped furniture and home-related sales.
Food retailers, such as cafes and supermarkets, have been the growth engine, with malls now expanding their food courts, the extra space coming from traditional non-food specialty and department stores.
''We have not as yet made any decision as to when the stocktake sales will start,'' a Myer spokesperson said.
The chief executive of the Australian Retailers Association, Russell Zimmerman, said the warm weather was playing havoc across the retail sector.
''This is having a huge impact on retail turnover, margins and stock holdings,'' Mr Zimmerman said.
''It's being felt across the industry, from those selling winter coats and boots, to the kitchenwares business, such as soup makers and crockpots, to electric blankets and heaters.
''Even if we get a sharp cold spell, most people will now wait for the sales to buy new items that they may only use for a couple of months.''
Mr Zimmerman said the weather would also cause stock holdings issues, given that most fashion retailers look to buy spring and summer clothes in the coming month.
''If there is excess stock that hasn't been sold, that will force the retailer to have clearance racks in the shops, which is never a great solution,'' he said.
The impact will also be felt at the investor level, with revenue down in the June quarter.
Craig Woolford, a retail analyst at Citi, says weather has a significant impact, not just on a company's bottom line but also on investor sentiment.
''Winter fashion has experienced unfavourable warmer weather throughout the season,'' Mr Woolford said.
Nora Farren, director of retail research at Colliers International, said discretionary sales would be hit, as would landlords' profits as people choose to stay outdoors.
''It's a two-fold impact, although we expect the warm weather will see people sit at cafes and restaurants,'' Ms Farren said.
''Money spent in cafes and restaurants is particularly good for the local economy as, unlike international luxury purchases where the benefit goes offshore, spending in cafes and restaurants is predominantly retained at home.''