Big returns for big savings Department stores were overshadowed in sales growth by the discount department stores in the recent financial reports from the major landlords, indicating the cautiousness of consumers. For the first half, Westfield Group reported that sales in its department store tenants fell 1.4 per cent for the period, while the discount department stores (DDS) rose 3.7 per cent. Some of the gains could be attributed to long-term discounting due to competition between Kmart and Target and also new advertising campaigns from both groups. Big W has also invested heavily in recent months with a new ad campaign that has drawn in customers. This comes as the department store operators, Myer and David Jones, warned that conditions remain tough. In contrast, according to Westfield's numbers, sales from supermarkets and food catering, restaurants and food courts all showed stronger gains. Retail services, such as nail salons and mobile phone/electronics, also reported better times. Analysts said the sales indicated that mall landlords would need to remix the tenancies, which would see less reliance on the traditional department store anchor. In its 2013 full year report, David Jones recorded a 1.2 per cent drop in sales for the 2012-13 financial year, with total revenue of $1.85 billion. Sales revenue for the company's fourth quarter, which ran from April 28 to July 27, was $450 million, down 1.3 per cent from last year. The company said it continued to face a challenging retail environment due to weak consumer sentiment and aggressive discounting from other retailers. Chief executive Paul Zahra said the company was focused on improving its margins and reducing the level of its discounting. In the latest Jones Lang LaSalle, Retail Centre Managers' Survey for August, it found the highest levels of sentiment recorded since May 2012, but the market remained challenging with tenant inquiry levels weak. There was a modest improvement in the sentiment of centre managers reported in the August 2013 survey, with 56 per cent of respondents expecting some growth in sales turnover during the next 12 months, compared with 48 per cent in the May 2013 survey. The Australian head of property and asset management, at Jones Lang LaSalle, Richard Fennell, said shopping centre managers were becoming more positive about future trading prospects, but retailing challenges remained. "One of the key issues highlighted in the August survey was that the market for food and convenience goods retailers is still reasonably buoyant," he said. Busy lifestyles continue to support coffee shops, cafes and takeaway food. The major retailers, particularly supermarkets, have continued to see steady growth. Food retailing has been a very consistent performer, outperforming the overall retail market for an extended period of time. Mr Fennell said retail services were the main area of potential growth for centres. "Mobile phone outlets are still strong and there has been interest from optometrists and other medical services, financial services, hairdressing and other personal services," he said.