SPENDING at department stores has slumped to its lowest in more than two years, despite recent signs the retail industry is limping towards a recovery.   

Turnover at the nation's stores edged up 0.2 per cent in October, the fourth monthly rise in a row, the Bureau of Statistics said yesterday.

Department stores, however, have missed out entirely on the recent rise, suffering their fourth consecutive slide in spending, which fell to its lowest level since February 2009.


The weaker than expected figures came amid more bad news for the housing industry, with building approvals plunging 10.7 per cent.

Although retail trade has now risen by 3.4 per cent in the past year, the improvement has been dominated by spending on food and cafes, up more than 4 per cent over the year.

Department stores, on the other hand, have suffered a 3.3 per cent yearly drop in sales amid deep discounting and rapid growth in online shopping.   

The executive director of the Australian Retailers Association, Russell Zimmerman, said the strength of spending on food and cafes disguised weakness in other parts of the industry.

Echoing calls this week from the retail baron Solomon Lew, Mr Zimmerman said an interest rate cut was needed to restore shoppers' spirits.

''We can say with confidence today's result will lift our Christmas expectations slightly. However, a December interest rate cut is still needed to boost spending confidence in the lead-up to Christmas and ensure some Christmas cheer for retailers,'' he said.

The ongoing weakness in department store spending comes after David Jones last week posted an 11.2 per cent slump in its first-quarter sales, citing lower confidence due to Europe's debt crisis.

In another sign the economy is subdued outside the mining industry, building approvals fell 10.7 per cent in October, after an even sharper fall of 14.2 per cent the previous month.

HSBC's chief economist, Paul Bloxham, said the slump suggested residential building was making way for the mining boom. ''There is a shift taking place from house building to building mines - we can't do both at once.''

The weak trends affecting much of retail and the building industry suggest much of the non-mining economy hit a slow patch in late 2011.

However, economists are divided about whether the Reserve Bank will cut interest rates at its final meeting of 2011 next Tuesday.

A senior economist at Commonwealth Bank, James McIntyre, said he expected the Reserve to keep official interest rates on hold at 4.5 per cent until February unless the situation in Europe took a turn for the worse in coming days.

''Retail sales outcomes like today's figures provide the RBA with the flexibility to cut rates if needed to bolster the domestic economy against potential global shocks emanating from the European sovereign debt crisis,'' Mr McIntyre said.

Despite the slump in department store spending, there have been glimmers of hope in other struggling areas within the retail sector in recent months.

The fashion industry enjoyed a bounce from the spring racing season in October, with spending on shoes and clothes up 1.2 per cent, the second rise in a row. But spending at fashion retailers is still 2.2 per cent lower than a year ago.   

Read more: http://www.theage.com.au/business/tills-quiet-at-department-stores-20111201-1o944.html#ixzz1fJk2rp6j

It's a no-brainer, really.

People can't/won't spend up big in department stores
when they are battling against obscene price rises in
essential services, food, and rent/mortgages.

No matter HOW low the stores' prices are.

I read yesterday Victorians are bracing for a 10% hike in natural gas and electricity prices.

Little wonder people arent spending.

We have a friend who has a general ebay and oztion business selling everything from furniture to kiddies cloths, and its been booming since the beginning of September. She is finding it difficult to keep up with the demand.

High prices in department stores and NO service is driving millions to the positive shopping experience on the internet.

She runs the business from her home/garage/shed. She does incorporate GST, but no insurance because its just her working the business so far, and hubby sometimes with the heavy lifting and so forth.  She just keeps general records for tax purpose. 

She will be introducing ladies shoes into her business in January, which are directly imported from Italy. She is going to start something “very unique” to internet selling that is bound to make her very wealthy - brilliant idea that she came up with when investigating the shoe manufactures in Italy.

She is going to try to advertise it on ‘today tonight’ and ‘a current affair’ and other shows…its that good.

Auspost is definitely benefiting from internet sales, and probably the only thing that’s stopped it from being sold by the Government.

culldav wrote on Dec 2^nd, 2011 at 11:13am:



I went to Italy many many years ago and bought a pair of shoes they were the best pair I think I had ever had.. Ive always had an akward foot one foot bigger than the other.. but they were so yummy..good luck to her.. but you can see where she saves a lot of money I believe workcover is so blown out now it is crippling.. and every time an employee goes on it then up go the premiums..overhead costs in this country are staggering we had our own business years ago.. I would never dream of doing that today though

Ex Dame Pansi wrote on Dec 2^nd, 2011 at 11:42am:



I guess thats one way of looking at it..its one of the great unskilled labor forces though...and if you happen to be in the 50s I expect it could be traumatic for some..

longweekend58 wrote on Dec 2^nd, 2011 at 8:39am:


rubbish !! It's got nothing to do with renewable energy. !! That's just a scapegoat by the libbo Luddites. The real problem is in privatisation of public assets and saving money by cutting back on the meter readers !!

My electricity company tried to rip me off on a power bill by estimating the wrong amount. Fortunately I had all of the previous bills to prove them wrong otherwise I could have easily paid it and I wouldn't have heard anymore about it. How many people would fall for the BS and pay it ??