Harvey Norman’s decision to stay open pays off as sale surge
RETAIL giant Harvey Norman has reported a surge in purchases of big ticket items such as whitegoods, televisions and furniture by shut-in Australian consumers during the coronavirus lockdown.
The company, headed by veteran retailer Gerry Harvey, reported second half sales in Australia were up 17.5 per cent helped by the decision to keep stores open and launch a print advertising blitz. Sales at its overseas stores slumped after many closed due to COVID-19.
The electrical and furniture retailer said the second half sales increase for Aussie franchisees, which includes the Domayne and Joyce Mayne stores, was based on figures to May 31.
The company also said it would pay a fully franked special dividend of six cents per share. Shares in Harvey Norman rose 7.32 per cent to $3.81 on Wednesday.
Mr Harvey said the massive injection of money by the Federal Government into the economy through schemes such as Jobsaver had helped retailers survive the lockdown,
"Back in February/March, we were wondering whether we were headed toward Armageddon," said Mr Harvey. "We just did not know what was going to happen.
"They were talking about 300,000 dead and a million people contracting the virus. Now we have come out the other side and we realise it could have been a lot worse."
He said the decision to keep stores open in Australia during the pandemic had helped sales. "Initially we did not know whether to open or close, but we stayed open and did better in Australia," he said. "Online is still only a tiny part of the business so most people are still buying in store."
Mr Harvey said he was surprised at the lockstep nature of consumer behaviour across the world during the lockdown.
"First everyone wanted a freezer and we sold heaps of those," he said. "Then they decided they wanted fridges and washing machines followed by big screen televisions and finally furniture and bedding.
"The strange thing was this behaviour was the same at our stores across the world so who was deciding what the mob should be buying?"
He said people did not know how the economy would perform in the months ahead but it was likely to be tough going. "We just don't know what's going to happen as this is not a normal recession," Mr Harvey said.
Harvey's two stores in Tasmania were the only ones in Australia to close briefly due to the virus, but temporary closures were more common overseas. Its stores in New Zealand, Malaysia, Ireland, Northern Ireland, Slovenia and Croatia were closed for longer periods due to government requirements.
The 12 stores in Singapore are yet to re-open.
Originally published as Harvey Norman's decision to stay open pays off as sale surge