Department stores all over the country are currently engaged in a hard fought battle to see who can offer the best prices.

As Christmas becomes a distant memory, people are hitting stores in hope of finding a bargain – and many are not being left disappointed.

The likes of Myer and David Jones are not only reducing their prices in the aftermath of the festive season, but are offering lower prices as a long-term fixture, Fairfax Media sources report.

David Jones has acknowledged that the next 12 months will be crucial for the company as customers become savvier and competition grows among big name retailers.

Former company chairman Bob Savage noted that to date, only a small number of products have seen their prices adjusted in order to remain competitive.

“The issue of price harmonisation will take some time to work its way through all the products in the store,” he commented.

Some international sellers are experimenting with limited price cuts to see what impact they have on sales figures, while other suppliers are doing what they can to boost margins from the Australian market.

Retailers now have a careful balancing act to perform – they need to lower prices to keep consumers happy, while still making sure that they are making a profit.

The question now is whether other stores will follow suit and give shoppers the bargains they are hungry for, without putting their own balance sheets under threat.

This follows a recent report in The Australian, which suggested that sale shoppers are looking for brand names rather than the best prices.

Aaron Faraguna, general manager of store operations at David Jones, explained that designer handbags are selling especially well, including the likes of Valentino, Fendi and Burberry.

Mid-market brands also proved to be big sellers in the post-Christmas period.