By Patrick Avenell
Harvey Norman stores around Australia are especially hurting from the global economic crisis, with chairman Gerry Harvey once again reporting disappointing sales figures to the ASX.
In keeping with the company’s commitment to report sales activity to the ASX each week for a month through October and November, Harvey today wrote to the ASX to convey some troubling news.
“Like for like written sales for the 28 days ended 19th October 2008 (sic) from the franchised “Harvey Norman” stores in Australia decreased by 5.8% when compared to the same period last year,” wrote Harvey. “Retail margins continue to be under pressure.”
Written sales are those that have been processed in-store but not delivered.
With news that Australian Harvey Norman franchisees are facing almost 6 per cent in downturn, and that margins are continually strained, the Government’s plan to hand out one-off cash payments to qualifying Australians is welcome news. Due to be paid on 8 December 2008, single pensioners will receive $1,400, couples will receive $2,200.
In addition to this, the easing of pressure on homeowners through dramatic interest rate cuts, including those by the Commonwealth and ANZ banks extra to the Reserve Bank’s reduction, means that retail stores may experience a mini-boom in the weeks leading up to Christmas.
Considering that Harvey believes there is a Harvey Norman franchise “in every state and town of any significance in Australia,” this mini-boom will be desirous nationwide.