Despite a slide in profits and revenue, Harvey Norman chairman, Gerry Harvey said it was not all “doom and gloom” reckoning on artificial intelligence (AI) to drive sales growth in the future.

Net profit for the retail group decreased 35% to $352.5 million while total revenue fell to $8.8 billion compared to $9.19 billion in 2023.

“This is the way it is in business at the moment,” Harvey told Appliance Retailer. And it is impossible to predict the market, because all the economic models were thrown out the window post-pandemic. “But this year will be the first to accurately compare sales with a previously normal year of trading.”

He admitted floor traffic was down between 10% and 30% as shoppers pull back on spending, but there was some positive news from the shop floor, buoyed by sales of robotic vacuums recording standout increases over last year. “Nothing comes near them in demand.”

And country areas are performing well. “Farmers are having a good year, and the miners are doing ok, and Mt Isa where I recently visited is powering along.”

Looking at current retail conditions, Harvey said retailers with sales up between 5% and 10% in the next six months will be travelling well. “But those that are not will find their margins are affected. The cost of doing business has gone up with wages, power, insurance, rent and shipping. Australia has become a very expensive place to live compared to many other countries.”

In the midst of softening trade, he remains positive about Christmas and expects increases on last year. “I will be very disappointed if sales from July to November have not recovered, with July results already gaining on 2023.”

More interestingly, the company has been closely watching developments in AI and their potential for the local market.  Harvey expects there will be new products arriving in the next couple of years that will excite a lot of people.

“For a retailer like us who lost a lot of our share of the consumer dollar to travel and restaurants post-pandemic, we will claw some of these dollars back, generated by the emerging AI market if these products are as good as we hope they will be.

“People with be curious to see what AI can do in a phone, a computer, and features in fridges or washing machines, and the ASPs will be higher.”