By Broede Carmody
Veteran retailer Gerry Harvey says his retail chain Harvey Norman is the “hottest retailer on the market” thanks to the company’s strongest jump in sales since the Global Financial Crisis.
However, one retail expert has pointed out that most big retailers are performing well thanks to strong consumer confidence.
Sales for Harvey Norman’s Australian division jumped by 5.7% during the first quarter of this financial year, with the retailer’s international divisions also showing strong sales growth.
Global sales for the first quarter of the 2015-16 financial year totalled $1.5 billion, up by 7% on the previous year.
Harvey told Fairfax his iconic business is the “hottest retailer on the market” right now off the back of the results.
“Customers are obviously spending their money and they’re also looking at buying quality products, as evidenced by the fact that our average selling prices are going up rather than going down,” Norman said.
“They’re looking to buy things that will last.”
Harvey shrugged off suggestions consumer confidence is subdued, arguing strong confidence is the reason for Harvey Norman’s sales growth.
The CHEP Retail Index, published today, predicts retail trade growth may slow in the lead-up to Christmas.
According to the index, retail trade turnover is expected to slow to 3.6% year-on-year for the month of November, down from 4.4% for the month of September.
Retail expert and chief executive of the Retail Doctor Group, Brian Walker, told SmartCompany it is clear retailers are performing well at the moment despite what the surveys are saying.
“There’s no doubt we’re seeing an increased consumer confidence,” Walker says.
“Lower cash rates, more confidence in the economy and retail generally is posting some really good results. So when Gerry talks about consumer confidence, I absolutely agree. A lot of the retailers are doing really well.”
Walker says consumers are choosing more quality purchases for big-ticket items and this is good news for the likes of Harvey Norman.
“Harvey Norman aren’t alone – Fantastic Furniture were up 16.9% and all of Super Retail’s divisions were showing positive sales growth,” Walker says.
“But Harvey Norman is a pretty good barometer of the retail climate in Australia. They have good, resilient branding and their location strategy has been strong.”
SmartCompany contacted Gerry Harvey but did not receive a response prior to publication.
First published on Smart Company, 28th October 2015.