Myer Joins the Queue of Struggling Retailers

Myer has become the latest retailer to warn of the damage done to earnings from last year’s lockdowns on the east coast and then the sudden advance of the omicron variant of Covid in December through January.

In a filing with the ASX on Tuesday Myer warned that its first half earning will be down on the prior year.

Myer joins a growing list of retail chains to report negative impacts from the lockdowns or omicron. They include Adairs, JB Hi Fi and Wesfarmers’ chains, Kmart/Target and Officeworks.

Bunnings, also owned by Wesfarmers avoided any real damage.

This was due to the impact of the pandemic and the loss of millions in JobKeeper subsidies.

Myer said that while first-half sales had risen significantly, it was unable to translate this into profit growth.

CEO John King said in the statement that total sales for the five months to the start of January were up 12.5% a reversal of the prior half when sales fell 13%.

He said sales improved even more when stripping out the impact of lockdowns the first months of the latest half-year period, with trade for November and December rising 17%. Myer’s fiscal year runs from August to July.

Online sales also surged 54.3% for the half, with the retailer’s digital channel now making up more than a quarter of total sales (consumer electronics group, JB HiFi said its online sales in the six months to December accounted for a record share of more than 22%).

But Myer said the buoyant sales did not translate to rising profits. Adairs reported on Monday that its earnings would be down close to 50% because of the impact from the pandemic.

Earnings were eaten away by a rise in the cost of doing business, largely due to a lack of JobKeeper funds which had significantly aided the retailer’s bottom line last year.

Myer received $144 million in JobKeeper money across the 2019-20 and 2020-21 and did not repay any of it, according to a notice a statement to the ASX in November.

“The results demonstrate the continued momentum of our Customer First Plan and the resilience of the business to overcome the initial months of lockdowns and still record significant sales growth during this period,” Mr King said.

“Whilst we are seeing Omicron impact sales post Christmas, we will continue to focus on growing our strong online business, ongoing engagement across our MYER one program and disciplined management of costs and inventory.”


About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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