Faced with a retail landscape rocked by cautious shoppers and the encroachment of online players, shopping centres are turning over more and more space to cafes, restaurants, hairdressers and beauty salons to keep the tills ringing.

"Creating that better experience is something you can't replicate online," said Angus McNaughton who, as the boss of Vicinity Centres, runs Sydney's Chatswood Chase and Melbourne's Chadstone shopping centres.

Mr McNaughton said Vicinity's portfolio was still "under-fooded", with plans afoot for more restaurants at its flagship Chadstone centre with an overhaul of its second-floor food court. The growth in demand for food from shoppers meant opening more dining options did not cannibalise the sales of existing tenants, he said.

Sales growth throughout the company's 84 centres slipped last financial year to 0.4 per cent from 2.1 per cent in the previous year, the company told investors on Wednesday. And Mr McNaughton warned that retailers would face another tough year as low wage growth and high living expenses would keep a cap on spending.

He said his centres would continue to respond to growing demand for food and services, revealing that Vicinity had cut floor space dedicated to tenants selling women's clothes by13 per cent over the past five years. Meanwhile space for cafes, food outlets and restaurants had grown 17 per cent and space for services such as hairdressing grew 44 per cent.

Turnover in the 12 months to June 30 reflected the same trend, with spending on food up 5 per cent, hairdressing and beauty services up 7.6 per cent and optometrists up 5.8 per cent.

The most recent figures from the Australian Bureau of Statistics show spending at cafes, restaurants and on takeaway food has grown 5.5 per cent year on year, while spending on apparel and accessories was up just 1.7 per cent and had gone backwards about 1 per cent at department stores.

After supermarkets, department stores Myer, David Jones and the discount chains Kmart, Target and Big W are Vicinity's largest tenants. They saw their sales decline by about 2.1 per cent last financial year.

Mr McNaughton said that although Myer and David Jones were no longer as important to shopping centres as they used to be, with international retailers such as Sephora, H&M, Uniqlo and Zara filling floor space they would have typically occupied, the two iconic stores were clawing back relevance by reinvesting in service and product range.

"Going back over the last five years, they probably lost their way in those two areas ... you've been paying a premium price for things and not getting the level of service, and they're rectifying that."

Rival shopping centre giant Westfield said on Wednesday that it was looking to food, technology, fast fashion and "athleisure" - active wear - to replace fading department stores in its properties in the United States.

Vicinity revealed on Wednesday that its underlying earnings fell 2.1 per cent to $741 million in the 2016-17 financial year and announced it would sell $300 million in assets. The company declared a full-year dividend of 17.3?? a share to be paid on August 30. Its shares fell 2.5 per cent to close at $2.67.