David Jones suffers sales slowdown in lead-up to Christmas
While overall sales increased by 1 per cent during the 26 weeks ending 23 December 2018, South-African parent company Woolworths Holdings noted in a trading update to investors that it saw “sales performance weakening in line with the rest of the retail market in the final weeks leading up to Christmas”.
Comparable store sales grew by 0.9 per cent, with any growth from new stores dragged down by the refurbishment of the Elizabeth Street flagship.
Efforts to downsize certain stores are underway, according to the release, which notes “further net space reductions to improve the productivity of the store portfolio are planned”.
However, online sales for the department store grew 46.1 per cent over the period, and contributed 7.7 per cent of total sales.
Woolworths Holdings-owned fashion brand Country Road saw comparable sales increase by just 0.5 per cent, while online sales grew by 20 per cent – representing 17.7 per cent of total sales.
Group sales for the period increased by 1.9 per cent, and were impacted by on day less of pre-Christmas trade compared the previous year.
Shares in Woolworths Holdings fell almost 10 per cent following the announcement, from $5.56 per share to $5.01 per share (R54.92 to R49.44).
Research from Citi analysts noted that, when compared to rival Myer, David Jones had a much more aggressive advertising campaign in the lead-up to the holiday period, though it was not necessarily seeing a healthy return on this investment.
Wesfarmers’ Kmart discount supermarkets suffered a similar downturn in sales over the same period, with comparable sales falling 0.6 per cent in the first half of FY19, ending five years of positive growth for the business.