And Harvey Norman shares fell more than 3% yesterday afternoon after the group reported a very sharp fall in 4th quarter sales in Australia.
Overall, the group had flat sales for the year from its stores here and in offshore markets, such as New Zealand with sales up 0.8% and same store (like for like) up 0.2%.
But that is a bit misleading, as it was a year of two halves: the first strong, the second weak.
But the company revealed that headline sales fell 4% in the final quarter at its Australian outlets (which are the overwhelming proportion of the business) and same store sales dropped 3.4%.
Harvey Norman said retail indicators showed a sharp decline in household disposable income and consumer sentiment for the last quarter in Australia.
In fact the company’s Australian sales growth has plunged from a headline rate of 6.8% in the second quarter to the negative result for the 4th quarter, while growth in same store sales of 6.5% in the normally buoyant December quarter in Australia, collapsed to the negative 3.4% for the 4th quarter.
Overall, sales growth for the Australian operations was 2.2% for the year to June, with same store sales up 2.3%, but that all came from the first half.
Third quarter sales were flat on a headline basis and up 1.2% on a same store basis.
For the second half sales fell on a headline basis by 4% and around 2.2% on a same store basis (like for like, as the company describes them).
The company said sales in electricals had softened and computer sales had weakened.
That was due to the absence of government stimulus money and the small company tax break on investment which ended in December.
Furniture and bedding, however, continued to take market share, it said.
The size of those falls recall the drops reported by the retailer in late 2008 and early 2009 as the impact of the financial crisis and credit crunch battered consumer confidence here.
Harvey Norman said group sales for the 12 months to June 30 rose to $6.08 billion from $6.03 billion a year earlier.
The shares ended at $3.53, down 12c on the day.
Like for like sales for the year for Harvey Norman’s franchised complexes, commercial divisions and other sales outlets in Australia, New Zealand, Slovenia and Ireland were up just 0.2%.
The company said that it needed to be noted that its sales data had been negatively affected by deterioration in foreign currencies.
The New Zealand dollar had fallen 2.1%, the euro by a huge 17.3% and the UK pound had fallen 20.9%.
"Under constant currency New Zealand and Slovenia had a positive quarter due to improving conditions," the company said in yesterday’s statement.
"Ireland continues to be close to line ball with last year."
Harvey Norman sales will continue to do it tough on a comparative basis for the rest of 2010 as sales for the next two quarters will be compared to the very strong sales figures for the same quarters of 2009.
