Harvey Norman sales drop signals tougher times ahead.

 

Retail turnover in Australia was up by 0.7 per cent in May and 4.2 per cent compared to last year according to the latest Australian Bureau of Statistics figures.

 

The monthly result was driven by a 2.2 per cent rise in the other retailing category, which includes florists, online-only, pharmaceutical and cosmetics retailers.

 

However, a big drop in reported earnings at electronics retailer Harvey Norman could be the tipping point for consumer spending, as analysts warn of a tough year ahead for discretionary stocks as well-known brands report softer conditions.

 

Retail experts view Harvey Norman’s falling earnings as just one piece of a bigger puzzle the entire retail sector faces, in which consumers can no longer deny the impact of 12 successive rate rises.

 

The ABS’s May figure captured Mother's Day, the 'Click Frenzy Mayhem' and some end-of-financial year sales being brought forward to entice customers to make purchases.