While retail veteran Gerry Harvey has predictably taken yet another swing at online retailers, he’s right about one thing – customers are getting back their confidence and spending is on the mend.
Harvey’s comments, on the back of a disappointing sales result, are yet another signal the retail market could see the beginnings of a recovery this summer.
“There have been a number of times where I’ve thought to myself, are we going to go broke? What the hell’s happening here? And it just gets worse,” he said, as reported by Fairfax.
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“I think we’ll look back at the year ended June 2013 and say that’s when we were on the bottom. I think we’re now on the way up, or I hope that’s what it is.”
The election has been pinned as a key factor in why consumers are so pessimistic. Fashion retailer Noni B partly blamed its poor results on the election, while anecdotal evidence from small businesses suggests confidence remains subdued.
Some cite the early announcement of an election date back in February as a reason for the confidence drain.
Retail Doctor Group managing director Brian Walker says while much of the evidence is intangible, “there is no doubt an improved mood”.
“I think it has to do a little bit with lower cash rates, a little bit to do with the climate – I think generally people get more optimistic when the weather gets warmer.
“I also think consumers have had a long period of hearing the media talk everything down, and so now, we’re just starting to see some recovery.
“I think you’ll see that more cemented once the election passes.”
Harvey Norman reported a 17.5% decline in profit last week to just $142 million.
But Gerry Harvey also took the opportunity to take a swipe at his favourite target – online retailers.
“There are not many people who want to buy a fridge, or a TV or a dryer without going in and having a look at it,” he said.
“If you look at the internet retailers, they say that’s how everyone thinks and it’s going to double. But there’s no evidence that’s likely at all.
“It’s hyped up and given a lot of media coverage. The truth escapes all the time, and it’s largely fed by internet retailers.”
Harvey also said the company is only managing to make 2% of total turnover from online sales – which still represents tens of millions of dollars.