Discounting Hurting Claims Harvey Norman Director
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One of the most senior executives in the consumer electronics industry has called for manufacturers to stop discounting. He claims that factories making TV’s to notebooks are slashing costs in an effort to support their faltering manufacturing operations and that the move is set to impact CE retailing in Australia in a bad way.One of the most senior executives in the consumer electronics industry has called for manufacturers to stop discounting. He claims that factories making TV’s to notebooks are slashing costs in an effort to support their faltering manufacturing operations and that the move will have a big effect on CE retailing in Australia.
David Ackery the General Manager  of Electrical at Harvey Norman said “discounting is rampant and in many cases manufacturers subsidiaries in Australia are being forced by factories to discount. This is not good because if we going to sell less we need to have some profit left in a product to survive”.
“Margin is good not bad because without margin all we are doing is product churning. During the past 12 months we have seen increased sales of notebooks and flat panel TV’s but at the same time margins have been eroded because of rampant discounting”.
Recently Channel News revealed that the margin in flat panel displays have dropped in price by as much as 30% monitors by 45% and that notebooks have fallen by up to 40% yet despite this Companies like Sony and Panasonic are introducing big price rises due to the fall in the Australian dollar and the rise of the Japanese Yen.
Len Wallis of Len Wallis Audio in Sydney supported Ackery in his call for more margin in products “Discounting is having a big knock on effect. We cannot buy a TV product  that is under the price that the mass retailers are selling it for example a Sharp large screen LCD TV at Bing Lee is $160 cheaper than I can buy it for. Plus you get a free Chinese dinner set and the chance to win a trip to Hong Kong”.
He added “The mass retailers must be suffering as they are not making much money selling TV’s even worse is that they will be dependent on rebates and these don’t come through for several weeks so many will be cash flow negative straight after they have made a sale”.
Several manufacturers contacted by ChannelNews were not available to comment.