Harvey Norman could open up to five stores in England in international expansion
The retailer’s billionaire chairman is worried about the election of a socialist mayor in NYC, a hangover from the inflation crisis which is in danger of resurfacing. Meanwhile, his ambitions in Britain are growing with every store opening.
Harvey Norman chairman Gerry Harvey has warned spiking inflation is a “big problem” that could widen the gap between home owners and renters and provide a platform for another electoral landslide in the mould of Zohran Mamdani.
Australia’s consumer price index in October rose to 3.8 per cent on the annual measure, the Australian Bureau of Statistics said on Wednesday, up from 3.6 per cent in September, underlining the challenge governor Michele Bullock faces in wrestling inflation back to the 2 to 3 per cent target band.
The billionaire co-founder of Harvey Norman is fretting over widening income inequality at home and overseas that is feeding populist politics and irrational policies such as those proposed by Mr Mamdani who thumped the New York City mayoral race.
He expressed deepening concern about the gap between home owners and renters, asset owners and low income households, and the impact on wider society.
“You see what happens in a place like New York, where a guy gets up and says, ‘listen, you know I’m a socialist, I’m going to look after you and you’re all going to be a lot better off’.
“And they all believe him. And the problem then is it probably makes things a lot worse for them,” Mr Harvey told The Australian after the company’s annual meeting in Sydney on Wednesday.
“You wouldn’t believe it if anyone had said to you five years ago, ‘we’re going to have a bloke like that fellow to become the mayor of New York’.”
Mr Harvey unveiled his ambitious expansion plan for Harvey Norman in Britain where he plans to open as many as five stores across England’s West Midlands.
But while Harvey Norman has made a huge success of breaking into new markets such as New Zealand, Slovenia, Ireland and Singapore, he conceded making a success of his store model in England would be a ‘slower burn’ as shoppers caught on to its offering.
“I talk to British customers and they love our shop, but they have never heard of Harvey Norman. ‘What do you sell? Socks?’ But you take them through what you sell, walk them around the floor and they love it, ‘you’re fantastic, we love you’. But if you ask 100 English people if you have ever heard of Harvey Norman, 99.9 per cent say ‘no’.”
Harvey Norman chief executive and Mr Harvey’s wife, Katie Page, revealed it had now fixed upon its second store in the West Midlands, complementing its first which opened late last year.
“Our continued expansion in the UK’s West Midlands remains a key market to establish and scale,” Ms Page told shareholders at the AGM.
“Just over a year ago, we launched phase one of this strategy with the opening of our flagship store at Merry Hill Shopping Centre. Phase Two of the expansion is on schedule, and we can confirm our second West Midlands store at the Gracechurch Shopping Centre in Sutton Coldfield will open in 2026.
“This new location will strengthen brand awareness across the region and bring Harvey Norman closer to customers north of Birmingham, driving further growth and engagement,” she said.
Mr Harvey told The Australian that while Harvey Norman was eyeing up to five stores in the West Midlands region, this would be governed by the success of those early stores with the British market a hard one to crack.
Unlike Harvey Norman’s push into Ireland, Northern Ireland, Slovenia and Croatia, a British arm was a more challenging proposition.
“The UK is a very difficult market to break into. And we’re there thinking to ourselves, if we could open up three or four or five stores in that area, and we can we make that work, and because we’ve got an offering that’s different to everyone else, and if the market accepts us, as they’ve done in all the other countries – have we got a future there?
“So if you open four or five and can see a future then you can open 45.
“But it will be a harder market for us to penetrate and get into and make a success of than any of the ones we’ve done in the past. It’s not going to be easy.”
Harvey Norman’s trading update showed that same-store sales growth for its flagship Australian stores was 6.4 per cent between July 1 and November 20. The pace is in line with the 6.4 per cent growth reported to the market for the month of July as detailed at its full-year results issued in August.
Total sales for its Australian stores between July and November were up 6.5 per cent.
In New Zealand, same store sales slowed since July, but were still up 6.3 per cent. In Britain where it opened its first store, same store sales were up 22.2 per cent.
And total sales for the group rose 9.1 per cent with same-store sales growth of 8.1 per cent.
Despite the likelihood of another interest rate cut before Christmas snuffed out by the spike in inflation, Mr Harvey said his stores in Australia could still trade strongly over Christmas and the new year.
But he conceded inflation was a “big problem”.
The 3.8 per cent reading was higher than the 3.6 per cent economists had expected.
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