Household goods and department stores both experienced negative growth (-2.4% and -1.7% respectively).
This is a worse outcome than I had forecast. I had predicted nominal headline growth of 4 per cent (vs. actual 2.6%), but I overshot on both food and department stores. The food sector experienced a sharper decline in inflation than I had anticipated, while the department stores simply found a way to underperform even my low expectations of them. David Jones was the lone exception.
Discretionary spending is still very soft and discount-driven in Australia right now and it is particularly concerning that the low end -- Big W, Kmart and Target -- is not doing better.
Of course, the economists will be copy-and-pasting from their last analysis and talking about how stretched the low-income consumer is, which is the usual way of avoiding the more structural issue of how the discount retailers themselves are not dealing from a full deck. They need to be out of shopping centers and in larger formats. They need wider aisles, clearer signage and better assortments.
Hate to be a pessimist, but that just isn't going to happen any time soon.