Australians are becoming more shrewd, making value for money their Christmas priority / File Source: HWT Image Library

David Jones chief Paul Zahra said consumers had a "new-found conservatism" that he hoped would be broken when Christmas spending kicked in.

And Woolworths chief Michael Luscombe told the annual meeting in Brisbane yesterday that the retailer was "witnessing a real shift towards value" with a "learnt fragility" apparent among consumers.

Both executives said consumers were tight on spending despite Australia's otherwise strong economy.

But the two retailers expect to overcome the problem - which they see as short-term - with both reiterating full-year profit forecasts.

Mr Luscombe said Woolies' target to open 150 big-box hardware stores over five years now appeared "to be conservative", and said its first store was on track to be opened in late 2012 in Braybrook.

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The market responded favourably to the retailers, with David Jones shares soaring 4 per cent to $4.67 while Woolies was up 0.87 per cent to $27.74.

Mr Zahra said DJs' comparable first-quarter sales lifted 3.2 per cent to $466.6 million, with the re-opening of the company's flagship Melbourne store on Bourke St a factor in the result.

"Consumer shopping behaviour is still patchy and we've seen some deflation in categories, specifically televisions," Mr Zahra said.

"All the economic indicators are very positive . . . (but) I think there's a new-found conservatism.

"I think Christmas will be the event to break that conservatism, or not."

Credit Suisse analyst Grant Saligari said the strong share price was a reaction to the "strong headline number".

"The underlying performance was well within our expectations, but we had expected to get quite positive results from the refurbishment of the Bourke St store," he said.

Mr Luscombe said he knew families were tightening the purse strings on household spending.

"While austerity measures are thankfully not on our government's agenda, they do seem to be on the agenda of the average family's budget and we are witnessing a real shift towards value," he said.

Unlike Myer, which chief executive Bernie Brookes last week said had felt an immediate hit from the latest interest rate rise, both Mr Zahra and Mr Luscombe said their businesses were yet to feel the effects.