Harvey tips festive season

Slower 2023 expected

BILLIONAIRE retailer and Harvey Norman chairman Gerry Harvey is hopeful of a “pretty good Christmas” as consumers spend at his stores but is cautious about the new year as a cost-of-living squeeze threatens to slow spending on discretionary goods.

The whitegoods, furniture and consumer electronics chain has rung up strong sales growth since July, other than in its outdoor furniture and airconditioning categories, punished by the floods and unseasonably wet weather across most of the east coast.

“Our sales in the last couple of days have been strong and so it does look like Christmas will be good, but the great unknown is next year,” Mr Harvey said after the retailer’s annual general meeting on Thursday. “The two areas that we are not happy with are outdoor furniture and airconditioning, for obvious reasons, but everything else across the board is good and if we had better weather, or hotter weather, well those two categories are usually very strong categories in our business.”

On Thursday in a trading update to the AGM, Harvey Norman confirmed the ongoing strength in the discretionary retail sector despite monthly hikes in interest rates since May and rampant inflation. The chain also unveiled new growth plans in Malaysia to make it the company’s biggest overseas operation.

The company released a trading update for the four months to the end of October, with strong sales growth across its flagship Australian stores as well as parts of Europe and South-east Asia.

Sales for its Australian franchisees between July and October rose 9.1 per cent, while like-for-like sales lifted by 8.8 per cent. There was also strong sales momentum at its Asian stores, with sales in Singapore up 7.5 per cent (10.2 per cent on a like for like basis), and in Malaysia total sales up 44.5 per cent and comparable sales better by 38.4 per cent.

Harvey Norman stores in Slovenia and Croatia for the period had more muted growth, with total sales and like-for-like sales both up 3.6 per cent, with sales declines in Northern Ireland, total sales down 26.4 per cent, and in Ireland where total sales fell 7.4 per cent. Total sales across Harvey Norman for the four months were up 6.9 per cent and comparable sales were better by 6.3 per cent.

The gains at Harvey Norman’s Australian stores, which form the bulk of the retailer’s operations, reflect continued strength in consumer spending for discretionary purchases despite seven interest rate rises by the RBA since May and accelerating inflation.

Rival retailer JB Hi-fi recently revealed similarly strong growth in first quarter trading. At its AGM in October, JB Hi-fi said its flagship Australian arm had recorded first quarter sales growth of 14.6 per cent, compared to its 7.5 decline in the prior corresponding period.