Rising Rich Lister Ruslan Kogan has unleashed on billionaire rival Gerry Harvey for blaming the economy for Harvey Norman’s slowing sales growth.
Kogan, 43, who has built an estimated $300million fortune from his online retail empire Kogan.com.au, launched the attack on Harvey, 86, who together with wife and Harvey Norman CEO Katie Page is worth an estimated $3.82billion.
The Kogan founder took aim after reading an interview in which Mr Harvey complained about tough retail conditions and falling foot traffic.
‘Right across all retail, right across Australia, doesn’t matter pretty much who you are, there is less traffic coming into the stores and so consumer spending has been affected,’ Harvey told The Australian.
‘The only retailer that is probably not affected might be Chemist Warehouse because they have got this model where everyone is buying weight reducing drugs – And maybe pet shops.
‘But if you talk about anyone else, anyone in consumer goods, like JB Hi-Fi, Good Guys, Harvey Norman, any furniture retailer … it has (worsened) over the last six months.’
Harvey Norman on Friday revealed its net profit grew two per cent to $528.46 million, while total system sales rose 3.1 per cent to $9.64 billion, despite sales growth slowing in the second half of the year.
Kogan, meanwhile, reported an $11.2 million net profit, while gross sales jumped 12 per cent to a record $1.042 billion.
Rising Rich Lister Ruslan Kogan, pictured alongside Anastasia Fai Kogan, has picked a fight with one of Australia’s biggest retail heavyweights
Retail heavyweight Gerry Harvey, 86, who together with wife and Harvey Norman CEO Katie Page is worth an estimated $3.82billion, has found himself in the firing line of rising online retail rival Ruslan Kogan
Kogan seized on his company’s stronger rate of sales growth to challenge Mr Harvey’s assessment that retailers were being hit by a broader slowdown in consumer spending.
‘Just a few days before Harvey Norman, Kogan.com.au announced our results, and guess what? Delivered strong double-digit year-on-year growth, and our sales grew to over $1 billion.
‘So Gerry’s narrative just doesn’t stack up. Yes, the economy isn’t great at the moment – cost of living is biting, and conditions out there are genuinely tough for a lot of families.
‘But people still need the appliances and everyday items to live a comfortable life. What’s actually changed is how customers shop.
‘They’re not just walking into a showroom and paying sticker price anymore. They’re getting on their phones. They’re comparing prices. They’re being smarter about their purchases.
‘They are being smart, savvy shoppers, and we love it. So it looks like shoppers being smarter is what is actually hurting Harvey Norman.
‘It’s not an overall retail slowdown. We need to call a spade a spade and acknowledge that Aussies are demanding more value than ever before. And as a business, Kogan.com absolutely loves that dynamic.
‘We benefit in an environment where every customer does their research, reads reviews, shops around, opens a few tabs, compares products, compares specifications, and if more and more customers are doing this, our business grows. We would love that sort of environment.’
Kogan founder Ruslan Kogan said Aussies are becoming smarter shoppers
While Kogan’s sales still dwarf Harvey Norman’s, the online retailer is growing in popularity
Unlike Kogan, Harvey Norman has physical stores across Australia
He said Aussies needed to be selfish and search for the best deals.
‘Do your research, look at alternative products, read reviews, make comparisons, because if customers do that, we’ll win a lot of market share.
‘Legacy retailers are quick to blame the economy when sales slow down, but that misses the entire point. Aussies haven’t stopped shopping – they’ve just stopped overpaying.’
