Australia’s largest department store, Myer Holdings Limited (ASX: MYR) has seen its first-quarter sales rise by 1%, thanks to warmer weather, and slightly improving consumer sentiment.
Revenues came in at $688 million, as a warm spring encouraged summer clothing spending, and the retailer cutback on discounts on sale items. Myer hasn’t reported a quarterly increase in sales since it relisted on the ASX in October 2009, according to Bloomberg. Same store sales rose 0.8%, double the expected 0.4% expected by analysts.
In more positive news for retailers, The Australian Retailers Association (ARA) expects shoppers to spend around $41.2 billion between now and Christmas, a 3.9% gain on sales compared to the same period last year. That figure could be much higher if the Reserve Bank cuts official interest rates early next month, which could see a last minute flood of sales.
Myer’s chief executive, Bernie Brookes, said that the trading environment continued to be difficult, and the retailer remained cautious. Like David Jones, Myer has embarked on a turnaround strategy, launching two new loyalty programs, and introducing more exclusive brands, which appear to be working very well according to Mr Brookes. He also said that the company was continuing to make progress on its website, and has a strong pipeline of future enhancements.
Mr Brookes also said that the retailer was making good progress on improving customer service and on enhancing the loyalty program for 4.9 million Myer one members.
The Foolish bottom line
The current slump in consumer sentiment appears to be improving, and retailers look set to reap the lion’s share of the rewards. A further rate cut in December would likely give them a massive boost.
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Motley Fool writer/analyst Mike King owns shares in David Jones and JB Hi-Fi. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.