A move by GFK, which has been described as “dangerous”, to issue weekly comparison pricing is eroding margins in the consumer electronics market, claim several major vendors. They say that mass retailers are responding to the “lowest price” information by immediately cutting their margins and that this is not good for the industry.GFK, which has been described as a “dangerous” organisation for the entire consumer electronics and technology industry by JB Hi Fi CEO Richard Uechtritz, is now facing the threat of being banned by two major retail groups after Uechtritz told ChannelNews this week that there was no possibility of his company lifting its ban on the German research company, which this month were stopped from collecting sales data from JB Hi Fi stores.
The General Manager of one of the top four consumer electronics companies told ChannelNews that GFK created a rod for its own back when it moved from issuing “monthly pricing data to weekly data”.
“Retailers took this information and responded immediately by matching a competitor’s pricing. This resulted in margins falling even further and this is not good for the industry,” the source said.
Uechtritz, who is expected to announce a record result next week, said, “GFK is a dangerous organisation to have around this industry. Too much confidential information on pricing and categories is getting out to competitors. We have in the past created successful categories only to see our competition copy us. It happened in New Zealand with us when we rolled new stores and new categories and this is not good.”
A major retailer, which does not want to be named at this stage, has said that it is also considering introducing a ban on GFK. “One option we have is to only issue monthly information to GFK and then restrict it to sell through data,” a spokesperson said.
GFK, which has failed to respond to either the industry or ChannelNews on the ban, is currently working on a solution, claim insiders.
Steve Rust, the Managing Director of Panasonic, who is in Melbourne for the regional launch of the Panasonic Lumix camera range, said, “If we lose another retailer it will create major problems for the entire industry. We have not been told anything by GFK on what is happening. We know from JB Hi Fi that they have banned the collection of data from their stores and we will work directly with them as opposed to relying on GFK for their sell-through data.”
