“Sales are good, and we are making a profit.” Harvey Norman chairman Gerry Harvey was responding to the company’s latest financial results. The retailer had a 3.6% drop in after-tax profit to $811.5 million and a 1.7% fall on sales that came in at $9.5 billion for FY22.
“Our profit is similar to last year and we are still talking about a huge amount of money,” Harvey told Appliance Retailer.
“Everyone is asking me about future sales and feedback from stores went from a slow- down, unchanged to will be stronger. We are operating in the greatest boom, with no unemployment, although we can’t get staff. Then the media tells us interest rates are going through the roof, house prices will drop 18% and we are heading into a recession. All this while there is more money in the economy than ever.”
Covid had an impact on franchisee operations but while the pandemic kept people at home they were buying online. “Sales went through the roof which is probably why after two good years there are expectations the next couple of years will be difficult.” He said indications are that sales prospects look positive with July/August figures lifting 10.7% and “everything is selling, from bathroom fittings and carpets to fridges and computers.”
Covid slowed new store openings too, but these were mainly confined to regional areas where sales were solid. “We can’t open too many more shops in Australia and New Zealand because we are running out of towns so any new openings will be on a smaller scale.” He said enlarging existing city stores is another option but expanding these sites has become expensive. “It’s difficult to open large stores in Australia now and if you do you will have to double the rent. You cannot get a big site anywhere in capital cities they are all gone.” However, the group plans to double its store numbers in Malaysia.