Computer retailers ride out sales slump

Computer retailers ride out sales slump

A straw poll of major computer resellers reveals March, April and May have been lean months on the retail front. As Charles Dickens might've said, "It was the worst of times. It was the worst of times".

"March and April have been pretty dreadful. May was a little better, but we're spending a fortune on advertising. I think we're going to have a pretty hard catch-up from July to December," Harvey Norman chairman Gerry Harvey told the Australian Financial Review. Phil Naylor, executive director of the Retailers Council of Australia, concurred. "Anecdotal evidence indicates that April was the worst month in living memory, and May was not much better," he said.

Harvey told Australian Reseller News computer sales were down in his network of stores by as much as 20 per cent over last year's figures. "It's been pretty bad," he said. "I'd put it down mostly to consumer uncertainty."

Australian Bureau of Statistics figures confirm April retail sales were down from March, and Rob Henderson, Dresdner Australia's chief economist, doesn't see a lot of relief on the horizon. "The economy is as weak now as [it was during] the last recession," he told the AFR. "A lot of retailers have very fine margins and have had trouble clearing stocks since the election."

Although Henderson is talking about all retail sales - not just computers - his words appear to ring true, albeit to different degrees. Les Thomas, general manager of Harris Technologies, a computer superstore operation, says that, although they're over budget, his company experienced sales declines of 5Ð6 per cent in March through May. "Although sales haven't been as strong as we'd like, I think we've been fairly fortunate and spared the brunt of it," he told ARN. "I've talked to other computer retailers who told me their sales are down by 30 per cent."

KateÊBurleigh,Êpublic relations manager of Dick Smith Electronics, told ARN, "Computer sales have definitely been soft in the last couple of months, but at the end of May we started to see an upswing."

Don Grover, stores director of David Jones, agrees - to a certain extent - that March-May was generally poor for retail computer sales, but puts a positive spin on things. "I don't think there's any question that sales have been down, but it certainly hasn't been as bad as some people are indicating," he said. "Overall we're seeing tremendous potential in computer sales and we're about to bring on four new At Home With Computers stores in the very near future. You've got to ride out the bad times to get to the good ones."

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