Comparable sales at David Jones fell 0.7 per cent in the 12 months to June 30, compared to 7 per cent growth in the same period in 2016, its South African parent company Woolworths revealed on Thursday.

"Concern around the housing market, increased mortgage costs, increased utility costs and the lowest wage growth in 20 years: when you put all those things together, customers are having to tighten their belts and that puts pressure on discretionary spend," Mr Dixon said of Australian consumers.

Mr Dixon said he did not expect to see any improvement in the near term, making it more important David Jones found news ways to entice shoppers into its stores, like exclusive brands and its $100 million new food and grocery offer.

David Jones' operating profit, which includes that kind of investment, fell 25 per cent from $170 million last year to $127 million.

Total sales grew 1 per cent to $2.2 billion, but Mr Dixon said the competitive retail environment forced it to discounting stock heavily, which saw its gross profit margin fall.

"I don't think anyone's seen the market as promotional as we've seen it," he said.

David Jones' private label fashion had a poor year, but Woolworths CEO Ian Moir said the company had addressed that by moving production and management from South Africa to its Country Road Group team in Australia.

"We didn't put enough design and quality, both of fabric yarn and make, into the product that we we're putting into David Jones, particular the top-end stores, and that was a mistake," he said.

The Country Road Group, which includes the Trenery and Politix brands, grew total sales 5.1 per cent while comparable sales slipped 0.4 per cent, Woolworths said, with operating profit growing $1 million to $98 million. Online sales were a standout, growing 25 per cent to make up 14 per cent of total sales.

David Jones is spending $100 million over the next three years rolling out its high-end grocery concept. Its first flagship food hall at Bondi Junction opened in earlier this month, which Mr Moir said was "going gangbusters", and will be followed by a smaller offering in its Wollongong store and at Melbourne's Malvern Central store in March 2018.

Mr Dixon said fundamental changes in retail markets and consumer preferences were having just as big an impact on David Jones' fortunes as the economic environment, which was why it had to make large investments in the business now.

"Yes we're spending a lot of money and doing a lot of brave things, but if we don't spend that money and don't do those brave things, we won't succeed," he said.