Aussies spend up in April

But department stores still given a wide berth

RETAIL spending has ticked up, driven by demand for groceries, household goods and eating out, but department store sales remain under pressure.

Seasonally adjusted retail spending rose 0.4 per cent to $26.557 billion in April, beating market expectations of a 0.3 per cent rise.

Retail spending in March was flat.

Food retailing rose 0.3 per cent to $10.818 billion in April, while household goods retailing climbed 0.7 per cent to $4.617 billion.

Cafe, restaurant and takeaway spending was also higher, up 1.3 per cent in April, after a 0.8 per cent fall the preceding month, Australian Bureau of Statistics data show.

But consumers gave department stores a wide berth, with sales at those stores down 0.9 per cent in April after a 0.5 per cent fall in March.

The latest numbers come as David Jones and Myer, the nation’s biggest department stores, struggle to attract customers amid competition from cheaper outlets and online sellers.

David Jones’s South African owner, Woolworths Holdings, wrote down the value of its Australian investment earlier this year, cutting its book value $712.5 million as weak sales led to a 39 per cent drop in half-year pre-tax profit.

Myer shares remain near all-time lows following a string of poor sales results, most recently a 3 per cent fall in thirdquarter sales to $2.4 billion – a result accompanied by a warning that warm weather was hurting winter sales.

Myer has also come under pressure from its biggest stakeholder Solomon Lew (pictured), who has repeatedly lashed out at executive chairman, Garry Hounsell, including criticising him for drawing a salary of $83,000 a month in the role he took up after CEO Richard Umbers exited.

Mr Lew, chairman of Premier Investments which is Myer’s largest shareholder, has maintained a long and strident campaign to oust Myer’s board amid losses and a slide in sales.

The ABS data shows that clothing, footwear and personal accessory sales have continued to come under pressure, down 0.8 per cent in April following a 0.2 per cent fall the previous month.

ANZ economist Jo Masters said the figures were better than expected but not enough to ease concerns about stagnant household spending.

“We remain cautious about consumer spending, particularly for discretionary items, given the slowdown in the housing market and high petrol prices,” Ms Masters said.