Harvey Norman takes on Apple to combat price falls

By Keri Algar

SYDNEY, NSW: Harvey Norman has turned to manufacturing monolith Apple to help in its overall fight against price deflation. As part of this strategy it has appointed a dedicated Apple product manager.

In its 2011 first quarter statement yesterday the giant retailer reported solid sales growth in the computer division, and is now looking to refresh its strategy, according to a report released by Citigroup.

“The company has appointed a new general manager and has begun introducing Apple product in a select number of Australian stores. A broader rollout of Apple products will begin in 2Q 2011, and should be supportive to sales through Christmas,” said the report.

Renewed interest in Apple computers on the back of its iPhone and iPod product lines, coupled with the Californian company’s reputation for setting higher than average price points means that Harvey Norman could benefit in a market otherwise suffering from destructive price deflation.

The Citigroup also said that the current deflation is cyclical.

“Harvey Norman, like most electrical retailers, is suffering from rampant price deflation. The issue is cyclical and primarily a function of the high Australian dollar. We expect sales trends to improve gradually over the next three quarters.”

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