With the cost of living crisis hitting hard and the looming threat of the RBA raising interest rates even higher, customers in Australia are now seeking discounts more than they have ever before.

The desire for discounts has extended even to otherwise well-heeled shoppers, such as those who shop at David Jones, who are generally insulated from overall economic instability.

David Jones chief executive Scott Fyfe told The Australian Financial Review that these shoppers are now being more cautious in spending and are looking out for more discounts than they ever have previously.

Foot traffic at David Jones over the past few months is down around 5 per cent, and six David Jones stores are under construction as part of its revamp.

However, online business is gaining momentum with comparative store sales growth slightly behind last year.

In June, the Reserve Bank held the interest rate at 4.35 per cent, but was categorical that it could not rule out further interest rate hikes.

Fyfe notes that should the Reserve Bank follow through with a rate rise, it could impact retailers. “I think another increase in rates would put further strain on consumer confidence,” said Fyfe. “When confidence is down, consumers will not feel the appetite to trade into key events [like Christmas]. But I think Black Friday is still a big opportunity.”

Apart from deeper discounts, Fyfe noted that shoppers were also looking for newness and value for money, and a seamless customer experience between online and in-store.

David Jones is reported to be investing more than $250 million over the next three years under new owners Anchorage Capital Partners.

About $100 million will be put into stores including beauty floors, and $75 million into its digital channels.

In the 2023 financial year, David Jones recorded around $2.3 billion in sales and delivered earnings before interest, tax, depreciation and amortisation of $115 million.

Fyfe’s growth strategy, dubbed Vision 2025, involves cutting the store portfolio, reducing costs and improving the customer experience.

The plan is to eventually make David Jones a more integrated omnichannel retailer. Part of that strategy will be to focus on digital. The retailer is launching a customer app in October. Its digital strategy will not only involve netting new customers, but also determining the brands and categories that people are most searching for and including them in the store.

“We know that over 500 customers a week were trying to search for Aesop online at David Jones,” he said. “We didn’t have it, but I’m delighted to tell you today we’ve re-engaged with that brand. By September, they’ll be back in our stores.”

On Wednesday, retailers across the country could breathe a sigh of relief after June quarter inflation eased to 3.9 per cent with the possibility of further RBA rate rises easing.

Running at 4 per cent in March, the Australian Bureau of Statistics said that the latest figure was only marginally higher than the RBA’s official forecast of 3.8 per cent. Had it been above 4 per cent, it could have resulted in a cash rate rise to 4.6 per cent from 4.35 per cent, a move that would have potentially impacted sales.