Harvey Norman co-founder Gerry Harvey is seeing the green shoots of the Australian economy

    Craig Cook
    March 15, 2013 11:30PM
Adelaide Advertiser.

GERRY Harvey, co-founder and chairman of retail giant Harvey Norman, is upbeat about the Australian economy and insists a resurgence is well under way.    

"The green shoots are definitely happening, consumer confidence is higher than it's been for a long time," Mr Harvey told The Advertiser in an exclusive interview this week.

"Confidence is also returning globally in the US and pockets of Europe, while it's been pretty robust in Asia."

The outspoken businessman has runs on the board to support his argument, with his company's share price of late returning a billion-dollar bonanza.

The share price has risen from $1.75 to more than $2.75 since the middle of December.

The first sign of a turnaround for the retailer came in January, when it reported a 4.1 per cent jump in overall sales across Australia with global sales up 3.8 per cent.



And Harvey believes the federal election in September will make little difference to the economy.

"People are saying that if you can get rid of the government it will help, but I don't think it's going to make any difference either way," he said. "Once the wave starts it's hard to stop."

As the biggest technology retailer in the nation, Harvey Norman had been hit hard by the dramatic drop in TV and computer sales.

"If we were just doing a furniture and bedding operation we wouldn't have been crunched at all," he said.

"That's (technology) where the biggest hole has been but it's filling in fast."

The 73-year-old is adamant the retail upturn will not be generated by online sales and dismisses claims online sales of 5 per cent are already the average for major Australian retailers.

"I'll be amazed in my lifetime if my business gets to being 5 per cent online," he said. "We've just had an increase of 30 per cent in online traffic and journalists love to report that sort of figure, but in reality it's gone from sweet bugger all to bugger all.

"It's nothing, but nobody wants to print the nothing. Our (online) sales are still less than 1 per cent and at best may make 2 (per cent) one day."

Harvey, who was claiming well before the bust that the dot.com boom of the late nineties was a "fraud", recognises there are successful internet companies, but maintains selling fridges and televisions is different.

Harvey Norman is soon to launch a new range of 100-inch TVs the entrepreneur believes will prove his point. "Very few of the internet retailers will even have it," he said.

"It will be given to us exclusively by the manufacturers because they can't sell these products online.

"Some analysts think people come into our shops and then go and buy the product on the internet, but the manufacturer knows if the customer can't see the product and assess it, they won't buy.

"That's why they only want to give it to us and the online retailer can go jump."   

Harvey is also heralding stronger commercial property values and continues to invest in that sector, where his company holds a portfolio of $2.2 billion.

"There's a lot of blue sky out there. Just be wary of the know-alls: the brokers, the analysts, the journalists and the special interest groups who always seem to get it all wrong," he said. "You've just got to keep your cool.

"We've got a situation in real estate that we've never seen before. You've got yields of 8.5 per cent on good retail and industrial properties and an interest rate of 3 per cent the spread is 5.5 (per cent).

"That's never happened in my lifetime. I'm still out there buying property, thank you, and people tell me I'm mad."

Harvey said his wife of 26 years, Katie Page, the chief executive of Harvey Norman, shared his optimism about the long-awaited American recovery. "My wife came back from skiing in Colorado recently and said the US is about to go," Harvey said.

"She said everyone is buzzing again. That's the word I'm getting from all over and I haven't heard that for years. Europe has not been far from a basket case but we've even seen a little turnaround in Ireland we were losing $50 million a year there, every year, so it's been a disaster for us, and not just us."    

Harvey claimed to have made made most of his big business decisions "within minutes", but still regards himself as "a fiscal conservative". "Making decisions quickly isn't for everyone and I've had my disasters but overall it works for me."

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Old whinger harvey says that online sales account for virtually nothing in his business but on the other hand he still wants the government to slap on a GST for every transaction. Go figure !! Is this dude full of sh.it or what !! And as for his yields in his real estate that is old harvey screwing his franchisees who are battling just to stay in business

I just bought a 39inch flat screen LED TV from Aldis for $299. I hear some aldis have got them for $249 and that includes GST as well !! I don't think old gerry can match that price. In fact I just checked - he's got the equivalent size TV at twice the price

Remember the $179 price tag for a latex pillow in HN and $20 in Big-W

Tell him he's dreaming