He described Harvey Norman's local operations as ''treading water'' as it gets hit by indifferent consumer spending and massive price deflation, which has led to the company repositioning its shelf space away from electronic goods where the price erosion is most severe.  

''The price of everything has just gone crashing down, and that's really affected our business so we're concentrating now on other products, and TV and audio has to take a smaller percentage of our shop,'' Mr Harvey said.

Not that it will be easy making any transition from computers and electronics, which have been a big part of the company's business, he said.

The problem is, the price erosion has become so bad the retailer can no longer contemplate selling its way back to a healthy position.  

Mr Harvey used the example of a 32-inch colour TV advertised recently for $299. ''We were selling those things for $699 a year ago.

''The whole market is in a state of extreme change at the moment so we've had to look at our business and said you can't solve this problem with TV sales because we'll have to sell three times as many to earn the same dollars as we were two to three years ago and that's what's affecting our sales. We're making more sales of everything, but it's all cheaper.''

He contends that this problem will be worse for competitors such as Dick Smith and JB Hi-Fi. Unlike Harvey Norman, they cannot reposition their sales towards furniture, carpets, and other household goods.

Christmas sales are expected to be healthy, but short of the usual spending Harvey Norman has grown to expect.

''I think this Christmas will be OK, but this is the first time that I can remember where I haven't said this Christmas will be the best Christmas ever,'' Mr Harvey said.  

Outside Australia, it was made clear that Asia holds the most promise for the retailer.

''I think our biggest ray of sunshine is Asia,'' said Harvey Norman managing director Katie Page, who recently attended the opening of the company's $38 million Space Furniture superstore in Singapore, which is acting as a regional sales hub.

Harvey Norman also remains committed to its troubled Irish operations.

''We are going to persevere and that's all there is to it,'' Mr Harvey said.

He did offer a glimmer of hope, citing a recent article suggesting that, having taken its economic medicine, Ireland may now be returning to growth.

''It's the first thing I've read where it looks like, maybe, Ireland is on the road to recovery,'' Mr Harvey said.
Comments

comments so far

   "problem with TV sales because we'll have to sell three times as many to earn the same dollars" seems they have to work a little harder to make the same dolars, sell 3 TV's instead for 1 to make the same profit.
   I can see why this would be hard, every time I go into Harvey Norman I have to look for someone to help me. The way I see it, More customers = more repete business = more sales on other items = more money = more profit? Maybe I am wrong about that, what do I know?.

   TrooRoo | Alb - November 30, 2011, 7:26AM

   And if the government failed to reach a surplus in 2012/13 - Harvey, Abbott, Robb and the Murdoch media would be howling for blood.

   Even little Wyatt Roy would be squealing that in his "lifetime" he has never seen a Labor government achieve a surplus.

   Gerry Harvey should stop complaining about the Labor government and have a good look at how his stores operate. Woeful customer service and overpriced asian-made products.  

   bettestreep2008 - November 30, 2011, 7:25AM

   Um, Mr Norman, d'you think people don't listen to your ranting any more is because phrases like: "We're making more sales of everything, but it's all cheaper" make you look like a whingeing idiot, whereas a phrase like "We're making more sales of everything, BECAUSE it's all cheaper" would make you seem, well, normal.   

   kambahkrawler | Canberra - November 30, 2011, 7:18AM

   Gerry Harvey is Gerry Harvey.
   He looks after his pocket first.
   During the GFC he saw the Gov. as his best mate now it's the enemy.

   Jim | Melbourne - November 30, 2011, 7:29A


Read more: http://www.theage.com.au/business/harvey-blasts-canberra-20111129-1o557.html#ixzz1f87GDgyV

'The price of everything has just gone crashing down, and that's really affected our business.    How wonderful that you have put your prices down Mr Harvey.  I  am sure that the customers will start to flood in now.  Or will they?.   

thats not what I am talking about.. its the talking down of business that are a very important cog in the wheel..it gives me the sh!ts to put it mildly..I like to see a friendly face and have a bit of help when I am spending my dollar. and if there is somethjing worng I can take it back I dont have to repack it and take it to the postoffice..and wait for whenever.. the other day I read a website on feedback about. well websites..who was good and who was bad when it came to buying on the net.. and I would say 80% was lousy..I am not saying this is a five minute wonder.. but I dont think it will take over the world like you predict pansi..not for a long time to come.

cods wrote on Nov 30^th, 2011 at 9:11am:



Internet buying and selling won't take over the world cods, simply because there will be a gradual or maybe drastic trend toward NOT spending in general. The world is indebted, both private and public debt is out of hand.

I've never had any trouble buying on-line, but I'm sure some people have nightmare stories to tell.

Friendly faces at Harvey Norman? as friendly as an attack dog.

Friendly faces at HN stores...

More like da juve from the movie of “Pretty Woman” where Julia Roberts is ignored because of the cloths she wears.

Walk into a HN store wearing shots, T-shirt and thongs looking to buy something and see how long it takes a salesperson to approach you. Ladies wear a baggy top, trackie daks and thongs and watch for the same response.

I bet no one will come near you!!


This doesn't happen on the internet

culldav wrote on Nov 30^th, 2011 at 10:42am:

I personally only shop at the one near us because of a friend that works there.

One story
I did have a pearler of an argument with a guy in the cooking department trying to tell me if you want to make anything decent you need a dual fuel oven ($4,500, both gas and electric oven), and when I said they dont need something that good the guy says to me "look mate, Im a chef by trade and I know the difference".
My reply was "if you were any kind of a chef you would be still one and not hocking crap to people they dont need, and the 2,500 meals a week out of our venue all on gas might disagree."
I was not happy.  My mate who is also department manager come over after hearing me though the store and they whisked me away.  The guy is no longer working there nor should he.

Ex Dame Pansi wrote on Nov 30^th, 2011 at 8:18am:


And exactly what will the employees do???...
You know, the workers, the '99%'???
The people the unions are supposed to protect?

cods wrote on Nov 30^th, 2011 at 9:11am:


you can get much more unbiased opinions and reviews online than you get in any shop !! Do you honestly believe that a salesman in a shop is goiing to bag the crap out of the products they sell ??