Retailer banks on outdoor living to lure people inside

Home appliance retail giant Harvey Norman is refurbishing many of its stores as part of efforts to lure shoppers back in after a big drop in foot traffic.

The number of shoppers coming into Harvey Norman's 195 Australian franchise locations is down 10 to 20 per cent, says executive chairman Gerry Harvey.

"It's across retail everywhere, except Chemist Warehouse. But discretionary retailers like us, JB Hi-Fi, The Good Guys, Bunnings, all the furniture shops, bedding shops, they're all in the same boat as us.

"When we walk through and talk to our opposition, they're all saying customer count is down."

Sales aren't down to nearly that extent, indicating that when customers do come in they are still buying, Mr Harvey told AAP.

For 2025/26, like-for-like sales were up 4.7 per cent in the first half, but dropped 0.1 per cent in the second half as consumers felt the impact of three interest rate hikes and higher energy costs from the war with Iran.

Consumer confidence softened further following the federal budget in May, resulting in more cautious consumer spending.

Sales were down further in July, falling 3.4 per cent compared to July 2025, although the company said that was related mostly to the timing of some major product launches.

Harvey Norman is trying to lure shoppers back to its stores via refurbishments and a major promotion on outdoor goods that begins on September 1.

"What we've done, we spent a lot of money doing up our shops to a state that when they walk in, it's a very good environment," Mr Harvey said.

For the 12 months to June 30, his company turned a net profit before tax of $528.46 million, up two per cent from the year before.

Earnings before interest, tax, depreciation and amortisation were up five per cent to $1.2 billion.

Harvey Norman's overseas operations contributed $135.7 million to its bottom line, including roughly one-third profit growth in New Zealand and Ireland.

The company lost $31.2 million on its United Kingdom operations, up from $23.4 million a year ago, as the company opened its second company-operated store in the country.