Harvey Norman sales surge 30% as Covid pandemic boosts furniture, whitegoods spending

Gerry Harvey welcomes “the best sales in over 60 years”, as the pandemic boosts demand for home furnishings around the world.

Gerry Harvey in Sydney. Picture: James Croucher.

Harvey Norman chairman Gerry Harvey has not seen anything like it. The shift in spending away from restaurants and recreation to homewares providing a retail boost even as the economy has stalled on the back of the Covid lockdowns.

Harvey Norman sales surged 30 per cent for the eleven weeks to mid-September, as Australian consumers splashed out on white goods, TVs and even bedding — while many had little chance of spending their spare cash at restaurants or on quick interstate getaways.

“This is my best sales in my lifetime and I have been doing this since 1959,” Harvey Norman chairman, Gerry Harvey, told The Australian on Monday.

“It’s the best sales in over 60 years, not just in Australia but in our stores right across the world. For me that is terribly important, human behaviour has been identical in all the countries we have stores.”

Computers and freezers were the first items to shift across Harvey Norman’s stores in Australia, New Zealand, Slovenia, Croatia, Ireland, Northern Ireland, Singapore and Malaysia, swiftly followed by white goods and then a couple of weeks later, televisions, furniture and bedding.

The sales were propelled along by newspaper advertising wraps in Australia, a marketing tactic that has since been emulated throughout Harvey Norman’s international retail network.

Announcing Harvey Norman’s 30.6 per cent increase in aggregated sales between July 1, 2020 and September 17, 2020, compared to the prior year, Mr Harvey noted that 18 Melbourne stores had been closed during much of that period, as had many New Zealand stores.

“When you look at the hiccups and you still see these figures it is more than extraordinary,” he said.

Shares in Harvey Norman on Monday closed up 2.1 per cent at $4.44 in a broadly weaker market.

Harvey Norman’s unaudited, preliminary pre-tax profit for the period from July 1 to August 31 is up 186 per cent to $178m compared to $62.m for the prior corresponding period including property valuations which Mr Harvey said were now costing him about $500,000 a year in independent valuation fees.

Irish sales are Harvey Norman’s strongest with another store about to open in Galway.

“Ireland at the moment is our best. It was our worst in 2008-09 where we lost $50m the first year, $50m the second year and $100m the third year. We lost $200m in four to five years, now Ireland is back in the money and outperforming. If you can hang in there and do the right things your time will come,” Mr Harvey said, adding that the main thing he had learned from the COVID-19 pandemic was you “never know what is going to happen.”

In Australia he said the drought, bushfires and the pandemic were not predictable. He believes most catastrophes come from left field.

“The lesson is be prepared and be alert because something is going to happen and you don’t know what it is.

“I have learnt to appreciate every day on the earth, and make the best of it. I have always known that but as each of these catastrophes happens it reinforces it.”

In Melbourne, the easing of stage four restrictions will commence on October 26 but Mr Harvey is pushing for his stores to re-open sooner.

“When we open in Melbourne the sales will go through the roof, we won’t be able to handle the business. The longer you leave (the reopening) the bigger the crowds coming into the stores due to Christmas.

Asked if he had been in discussions with the Victorian government about his ongoing store closures Mr Harvey said “I am sure if I picked up the phone to (Victorian premier) Dan Andrews he wouldn’t want to talk to me.

“But if they get down to 20-30 cases a day there would be no valid argument to close the Harvey Norman stores.

“We are fairly big shops there are not a lot of people in there, we are not like supermarkets.”

On the border closure front Mr Harvey foreshadows that state governments will be in for strident criticism through the ongoing border closures when there are virtually no COVID-19 cases.

“You might get away with it for a while, (but) the public will rebel,” he said adding that the state border closures decisions are entirely political.

Mr Harvey said political polling was showing the public is on the side of border closures at present because of health fears. But when the polling reveals the public wants the borders opened that will happen.

“As long as a bigger percentage of the public accept that they will keep doing it,” Mr Harvey said, adding Prime Minister Scott Morrison knows it’s political, that is why he “goes off his brain about it.”