Consumer caution costs Harvey Norman: flat first half sales results

By Keri Algar

SYDNEY, NSW: The second quarter proved tougher than the first for Harvey Norman with global sales for Q2 up a mere 0.2 per cent, compared to the same period last year. Total global sales for the six months to 31 December 2010 were up 1.3 per cent.

Notwithstanding the Northern Ireland and Slovenian businesses (which, in the case of Slovenia posted double digit sales increases) the Australian business fared better than New Zealand and the Republic of Ireland. First half sales increased in Australia by 3 per cent. Like for like sales in Australia for the first half were down 2 per cent and like for like sales for Harvey Norman global were down 3.1 per cent.

Price deflation of 30 per cent for the electrical category coupled with a lack of demand for air conditioners were cited as reasons for the difficult trading environment, according to a Harvey Norman statement.

Similarly, a competitive computer and laptop market “driven by a cautious consumer” were also held to blame.

On the flipside Harvey Norman said SLR cameras, smartphones and gaming consoles had contributed to positive results, and that the tablet market will present profitable opportunities, which its franchisees are well positioned to maximise.

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