More retailers should emulate Myer’s tiered pricing strategy to insulate sales as discretionary spending is squeezed.
When Myer chief executive John King was running House of Fraser more than a decade ago, the storied British department store chain enjoyed record sales in the final year of the global financial crisis.
King is hoping a similar “good, better, best” strategy will keep the tills ringing at Myer as rising mortgage rates and soaring energy and food prices crimp discretionary spending.“That’s the beauty of having entry, mid- and slightly higher price points – you can trade the customer through it,” King told Window Shopping last week when Myer reported“In the numerous recessions I’ve been through in 40 years in retail, that’s definitely what I’ve seen.
Morningstar analyst Johannes Faul estimates Myer’s sales rose 10 per cent in February after 20 per cent growth in January, and 24.2 per cent growth in the six months ending January.In comparison, NAB data shows department store spending rose 4.7 per cent year-on-year in February, while clothing sales rose 5 per cent year-on-year and household goods spending was flat.
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