A balmy winter across the eastern capitals and a tough federal budget are playing havoc with retailers, leaving them stuck with unwanted winter stock and shoppers missing from the stores.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
And any recovery for the industry that is worth $100 billion and employs more than 450,000 people, might not appear until later in the year as weather patterns return to normal and the uncertainty around how a new Senate will treat Treasurer Joe Hockey's budget measures becomes clearer.
Consumers could be the winners, as insiders predict massive discount sales after July as retailers burdened with unwanted stock start slashing prices to clear the way for next season's range.
On Tuesday, National Retailers Association chief Margy Osmond said the sector was doing it tough.
''We have been out there quite publicly saying that the warm weather will have had had an impact, especially in the discretionary spend and in the fashion environment,'' Ms Osmond said. ''But from the point of view of the big discretionary spend retailers, they have got a store full of winter clothes that nobody has wanted to buy up until the last week or so.''
Two leading retailers added their names to a growing list of discretionary retailers blaming a mix of weather and the budget for a shock downturn in sales and profitability.
Discounter The Reject Shop, with more than 320 stores nationwide, and Pacific Brands, whose top selling clothing brands include Bonds, Berlei, Hard Yakka, Hush Puppies and Sheridan linen, echoed the warnings hurtling through the retail sector.
PacBrands head John Pollaers said he was surprised by how fast sales fell following the budget with the weather also ruining forecasts.
''The perfect storm has been a surprising shift in consumer sentiment, more than I would have expected, and the warm weather, which unfortunately does affect our business,'' Mr Pollaers said.
The Reject Shop said its sales had declined following the budget's release in early May. Its winter apparel department had suffered from the warm weather too.
Two weeks ago, women's fashion chain Noni B issued its own earnings warning, saying April and May sales had been constricted by unseasonably warm weather as well as reduced spending by its core customers after the budget.
Ms Osmond said the weather aspect was especially tough for businesses to predict and react to.
She said typically there was a dip in spending after a budget was released.
''But usually that picks up around June - but effectively this time we have ongoing uncertainty because we don't know what's happening in the Senate and I think what we are looking at is a later recovery period than June so probably pushes that bounce back off a few months.''
Shrinking confidence in the economy showed up in the latest job ads survey, released on Tuesday, which showed job advertisements fell in May for the first time in five months, declining 5.6 per cent.
