Myer Flags Sharp Consumer Spending Pullback
Synopsis
Australia's department store chain said higher fuel costs, interest rates and a weaker housing market are weighing on discretionary spending.
Myer, the department stores chain in Australia, has flagged the early warning signals of a sudden decline in consumer spending through the last quarter of its 2026 financial year on account of high cost of borrowing and continued pressure on consumer budgets.
It was pointed out that the trading was materially weaker in June and July which resulted in a lowering of expectations as well as the possibility of revising asset values because of prevailing market conditions.
Investors immediately reacted by pushing the share prices of Myer down by 12 percent on the announcement day.
Trading Slowed as Household Spending Tightened
The 52-week pro-forma sales growth at Myer fell by 0.3% compared to 0.5% recorded in the previous financial year. The pro-forma operating gross profit range stands at A$1.60 billion to A$1.61 billion, a decline of 2.1% to 2.5% from FY2025.
According to Myer, the decline in the sales performance was attributed to high fuel inflation, three interest rate rises in 2026, a cooling property sector and lower household income growth rates. Sales declined by 5.5% in June and further declined by 4% in July. Discounting at the retail level failed to increase discretionary purchases.
Pro forma operating EBIT forecast for the year ranges from A$64 million to A$67 million compared to A$81.5 million recorded in FY2025.
Retail Sector Reflects Broader Consumer Caution
The trading update provides an overview of the performance of retail shops across the Australian region. Household consumption has been relatively weak, even though inflation has slowed down recently, based on ABS Retail Trade statistics.
The consumer sentiment has been relatively weak above its long-term average due to pressures on household budgets, as per the Westpac-Melbourne Institute Consumer Sentiment Index.
The retailers have faced a decline in discretionary spending as the consumers have shifted their focus towards essential spending, with the same trend being witnessed in New Zealand, the United Kingdom, and also a few of the European regions.
The spending trends of the consumers have become more volatile since the second half of the year due to a variety of economic reasons, as stated by the executive chair Olivia Wirth.
In addition, the retailer highlighted that it will review the possibility of performing a non-cash impairment of certain assets for its FY2026 period, which is anticipated to take place in September.
Source: Smart Company
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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