Gerry Harvey has responded to his retailer’s trading update issued this morning, which prepared the market for a full-year profit drop of around 30 per cent.

Harvey Norman’s profit before tax for fiscal 2023 is expected to be in the range of up or down 5 per cent of $670 million – a major dive from the $942.8 million in earnings posted during the 2022 financial year.

Harvey confirms that sales are down across the board.

“Some stores, yes sales are down, other stores no, and so across the board, yes, there has been a weakening in sales and a weakening in foot traffic, but that is probably for every retailer,” he told The Australian, noting the bathroom products were the one category not to see a drop in sales.

Harvey also seemed unfazed by the mounting interest rate rises.

“There is no question it is having an effect, but I have lived through higher interest rates, these are low in comparison, I think with interest rates there is no certainty they won’t go up another 1, 2, 3 per cent, and if that happens how will we go?

“We had interest rates at 10, 12, 13 per cent for years at one stage and we went okay then and if you are going to have a recession you probably have got to have unemployment above 8 or 10 per cent.”

Harvey also pinned only a 10 per cent chance on Australia falling into a recession, before comparing the retailer’s pandemic problems to a horse stalling mid-race.

“It actually throws the company out of momentum. It’s like a horse race, your horse has got to have that momentum and then this bloody thing comes along called a pandemic, and you close, then you’re open, and your sales go through the roof, and then you have no sales and then all your staff and the people running your store are affected.

“I just wish I’d never seen it, because we’re on a nice upward trend, going up in a normal fashion, then the graph gets thrown out of equilibrium.

“In a way, we have to now got to start again in many ways and start working back towards profit to $1bn before tax, that is where we are heading.”

Harvey Norman will release its full-year financials on August 31.