Harvey Norman may be doing well, but is facing tough competition from the likes of Woolworths Dick Smith and Tandy chains and the independents in RetraVision.

No wonder investors have Harvey Norman on a watch list. Despite the best attempts of founder Gerry Harvey, to talk up sales growth in November and December, there’s no real sign of an explosion in sales over Christmas.

The company said Wednesday that sales rose 12.5% in the first six months of the year, with same store sales up 6.2% (here).

That’s sounds good, but it’s nowhere near the 21.3% figure mentioned in late November at the annual meeting and forecast for December.

Compared to the sales growth for the four months to the end of October, detailed in late November it’s also not too shabby. Sales in the four months to October 31 grew 11.4% with same store sales growth of only 4.9%.

So there was definitely a surge in the last two months of the year.

But there’s a reality check in the sales announcement for the first three months of the year to the end of September (here).

Sales growth in the first quarter was 12.8% with same store sales up 6.0%. So overall headline sales growth was below the figure for the first quarter, but slightly higher on a same store basis, pointing to a less than impressive performance in some parts of the businesses, and perhaps some currency impact in their contributions from the overseas businesses.

This means the company’s doing well, but is facing tough competition from the likes of Woolworths Dick Smith and Tandy chains and the independents in RetraVision.

Coles Myer’s Megamart operation is still too small for any meaningful impact, but every sale that it makes is one that hasn’t gone to Harvey Norman or its competitors.

It also indicates there is significant price competition with a flattening impact on margins.

Finally the Harvey Norman announcement applies across all its stores, the franchised Harvey Norman outlets in Australia and the overseas stores owned by the company.

Crikey recently highlighted a major management change and apparent power struggle inside Harvey Norman late last year.

It would be handy if Gerry Harvey and his fellow directors could see their way clear to break down the sales figures for Harvey Norman in Australia and the rest into separate comparisons on a headline and same store basis.

A break-up between Harvey Norman and Domayne chains would also be handy, like Woolies and Coles break down sales growth between their various businesses.

The sales and margins in the offshore businesses are of more direct benefit to the parent than the sales within Australia where the parent derives its money from franchising and other fees. While these are based on sales it is an indirect comparison. Harvey Norman also makes money from developing new sites and store complexes, which helps lessen the importance of the sales growth figures.

Harvey Norman shares fell after the news to $3.00 but then recovered 7c to $3.07 to be down only down a cent at midday.

But the shares are still well under the most recent high of $3.40 of October 2003, unlike Coles and Woolies which are both close to their highs at the moment.

That’s a pointer to the concerns some investors have that the easy sales and profits have gone for Harvey Norman and it is now entering its mature stage as a retailer.