Discount retailers and fast food chains are doing a roaring trade as the economic decline drives consumers to cut household budgets.

News.com.au reports that outlets such as The Reject Shop, McDonald’s and Domino’s Pizza have reported strong earnings growth over the second half of calendar 2008.

Domino’s reported $329 million in sales during the six months ending in December 2008 and Reject Shop reported a 10% increase in net profit.

Gerry Masters, Reject Shop managing director, says the government’s stimulus package had helped boost sales in late December, meaning Christmas came early for the retailer.

“Considering the tough retail conditions, we finished the last half very well, and January has been very encouraging,” says Masters.

The Domino’s result defied an overall downturn in food retailing, with figures from the Australian Bureau of Statistics showing spending at cafes, restaurants and takeaway outlets fell by an adjusted 2.2% over the same period.

Domino’s chief executive Don Meij believes his company was benefiting as consumers were opting for a pizza in front of the TV, rather than eating out.

“I have been in the business for 22 years and I have never seen a consumer shift on this scale… people who might spend $100 at a cafe or restaurant are now buying a $20 meal instead,” explains Meij.