A second Australian store has reported an increase in sales, prompting suggestions that the retail market is improving.

David Jones has announced a 2.5 per cent rise in third quarter sales which follows on from retail giant Coles Myer who reported an improved quarterly result.

Chief executive of David Jones, Peter Wilkinson, said the outlook for the fourth quarter, to the end of July was difficult to predict but he expected sales to pick up as the Christmas period approached.

He said the result was a hint that the tide could be turning after a 1.1 per cent decline in the previous quarter.