Harvey Norman’s pre-tax profits have surged 160.1% reaching $341.1 million in the first four months of the financial year to October 31, 2020. “To be up 10% or 20% is great but 160%, that has never happened before and it’s off the Richter scale,” chairman Gerry Harvey told Appliance Retailer.
“I have not seen the surge in business that has been happening over the last six to eight months and I started selling in the 1950s.”
Australian franchisees saw sales increase 29.7% increase July 1 to November 21, 2020 with comparable sales up 30.4%. Looking to overseas markets, Ireland was the standout performer with total sales up 62.9%, followed by Slovenia and Croatia (23%). New Zealand total sales grew 19.8%, ahead of Northern Ireland (16.8%), Malaysia (6.6%), and Singapore (3%).
Harvey said when sales started to take off during March-April it was a big unknown as to exactly where it would end up. “Everyone had an opinion and they were all wrong and sales continued as the months rolled by. Then the big question was, wow this is fantastic, but how long will it last?”
There were hiccups along the way with overseas stores opening and closing, with Australia the only country where it did not happen, until Melbourne closed then Adelaide. But sales were not hampered by these temporary store closures, Harvey said.
“What is interesting is that the increases have come from across the world and in countries like Slovenia, where there were no government support measures in place, sales went up there as well. In our case, it’s not so much the money that is out there it’s more about the change of lifestyle.
“People are not going out to restaurants or spending money on travel they are staying home and businesses selling garden products are enjoying a bonanza. But sales are coming from all categories which give us an advantage in some respects as we cover all the categories.”
While he has expectations it will be a good Christmas, there are issues with undelivered orders. “We know we are going to have a big Christmas but there are a lot of products we just cannot get and it applies to anything that is imported.”
Online sales have gone through the roof too, but he warned many consumers are running a risk of not getting their orders in time, a problem exacerbated by Black Friday and Cyber Monday activities. “Online sales will still go up but once people start shopping in-store again, which I believe they will, the sales previously felt online won’t be as high.”
And does he expect the consumer shopping spree to continue? “It is unbelievable we are going so well. I am starting to think sales will continue because there will be money thrown into economies around the world and interest rates are low.”