Myer Holdings is planning its biggest stocktake sale yet following a sharp downturn in consumer confidence levels.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 7 per cent in May, its biggest drop since December 2011.
The department store will hold a “Super Saturday” stocktake sale to drive sales, as well as a offload stock held by some its suppliers.
“It’s getting harder [to maintain sales growth] because consumers are responding but we’ll give it a good fight with a very, very, strong stocktake sale,” said Bernie Brookes, CEO of Myer.
“As the consumer becomes less willing to spend we need to become more willing to entice them to spend.
“This is the not the heyday for discretionary retail… it’s still very patchy and inconsistent and there is no sign of significant turnaround in consumer sentiment.”
Myer and rival David Jones, as well as larger fashion chains, have been widely criticised in the last few years for encouraging endemic discounting, which some say has conditioned consumers to expect year-round sales.
Yesterday, Myer reported its total sales in the 13 weeks to April 27 were $652.5 million, up 0.5 per cent from $651.1 million in the corresponding period in 2012.
Like-for-like sales, which strip out the effects of new store openings or closures, were up 0.4 per cent from the previous corresponding period.
The department store has now posted four consecutive quarters of like-for-like sales growth.
Myer made a net profit of $87.9 million in the first half of its fiscal year, the six months to January 26, up one per cent from the previous year.
It has not issued any guidance for the current full year.