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Harvey’s ‘unfair advantage’ losing its gloss?

November 24, 2010: Some readers will be bemused by Gerry Harvey’s complaints of Australian retailers being subject to ‘unfair disadvantage’ due to GST-free sales from overseas. (As opposed to the fair disadvantage meted out to Harvey photo services competitors?)

Those who feel this is a major issue in the industry will on the other hand be shouting, ‘Go Harvey, go!’ While executive directors of industry associations have been flapping about in high dudgeon but to little effect, Harvey has put the issue on the nightly news with a few typically forthright statements. (The downside is that now everyone knows there’s a bargain to be had on OS websites – not just the camera- or internet-savvy segment.)

But what interests me is the timing of Gerry Harvey’s grim comments on retailing, coming as they do at the end of the retailers’ second ‘9 cents for 9 days’ campaign in as many months. (Which itself smells a bit of panic.)

I would assume that Gerry Harvey gets detailed reports on company sales on a pretty regular basis, particularly during a critical promotional period. Now either the old fox is doing what old foxes do, or he is worried at least in part because the just-concluded promotion was a flop. The results would have been top of mind as he was addressing his AGM and the media. As reported exclusively in Photo Counter, the goal for the promotion was 16 million prints. Now even if that number of prints were made, the promotion wouldn’t be a success unless it drove overall sales through the store. In fact it might be that simply to break even on what many insiders see as a below-cost marketing adventure, Harvey Norman has to increase sales of other products.

Could it be, then, that there’s light at the end of the tunnel for smaller specialist competitors? Perhaps this marks the beginning of the end of photography being the sacrificial lamb of Australian mass retailing.

Every sales gimmick has a finite life. Could it be that consumers are getting wise to the cheap print con? That saving $1 or even $5 on a 100-print order is hardly worth the petrol to get to a Harvey’s outlet? Or they are taking advantage of the offer while adhering to the Shipton family motto: ‘Don’t spend any money!

Could it be that Ted’s counter-attacking 8 cent promotion diluted the impact of the Harvey Norman offer?

If cheap prints don’t work anymore, Harveys has only the ‘Pay-nothing-until-you’ve-been-dead-for- five-years!’ style lure to fall back on – which also has some issues among a population up to its neck in debt.

Or could it simply be that the difference between 9 cents at Harveys or Big W’s ‘Everyday’ 10 cents price has neutralised the impact.

I’m barracking for the first option! If I’m right, you read it here first. If I’m wrong – well, I could have been right!

– Keith Shipton

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