E-tailer says Harvey Norman's sales no indication of local economy

In a statement to the ASX, Harvey said written sales for the 28 days ended 12 October from franchised Harvey Norman stores in Australia, will be reported for each of the next (4) weeks.

“By doing this the company hopes to give guidance as to what is really happening out in the retail market,” said Harvey.

“There are Harvey Norman franchised stores in every state and town of any significance in Australia.

“Sales turnover for the franchised ‘Harvey Norman’ stores in Australia is indicative of retail market conditions in Australia.”

However Kogan told CRN that he found Harvey Norman's approach extremely arrogant and naïve.

“It makes the assumption that everyone shops in those stores,” he said.

“It doesn’t recognise consumers that - looking for the best prices in the current economic climate - are moving to online retailers.”

Kogan claimed not everyone’s shopping at a Harvey, with shoppers hopping online for quicker access to cheaper goods.

Ignoring Internet shopping was not a good indication of how the economy was holding up, he said.

“People are becoming smarter and are going online to save money on travelling to stores,’ said Kogan.

“Consumers are starting to recognise that online shopping is safe. It also gives them more information than walking into a Harvey Norman store.

“I feel very uneasy walking though a mass merchant retailer because customers are being misinformed by sales people that have had half an hour training course.”

Kogan can understand that Harvey Norman’s business has been painfully slow in moving online.

“No doubt through fear of cannibalising their retail sales model, but they surely can't think their stores are an indicator of the state of the economy.

"The recent economic turmoil will continue to drive more Australians online to get better value for all their consumer electronic products and related purchases," he said.