Myer’s massive fight for survival could destroy other Aussie department stores

Department store Myer this week announced a $118M loss, the largest in their 118 year history in retail and it looks like their fight to survive challenging competition from the internet is shaping up in a way that will impact every other department store in its wake. 

Myer flagged that they would be heading to a price war in their annual results, to try and lift consumer shopping activity levels.  Chairman, Garry Hounsell, who has temporarily stepped into the CEO role while they search for a new leader, said this week that “Myer needed to trade more aggressively” to seek turnaround. 

Both Myer and David Jones are this week spruiking 50% off sales, each with colourful catalogues of premium brand products.  They’re hoping consumers will step up and buy something, anything to help them move products on shelves.  It’s the next step in the sad tale of Australian retail.  

Months ago Myer released a “New Myer” strategy, seeking to attract affluent customers with fancy in-store designs and layouts, premium brands and nail bars.   They hoped shoppers would linger longer in stores and suck up $300 premium branded shirts.  But just months later, the CEO and the strategy are gone, and short-termism is back with the company just happy to clear stock in price drops.    

The benefit of any price war will be to the consumer not the retail industry.  In fact, some retail academics warn it could have a significant impact on other struggling retail brands like Target.