EXCLUSIVE: The new boss of JB Hi-Fi, Terry Smart, claims that all the foundations are in place to grow the business and, while discounting has been rampant during the flow of Federal Government economic stimulus into the market, the market will remain buoyant moving forward.
In an exclusive interview with ChannelNews, Smart, who started at JB Hi-Fi at the same time as the retiring Richard Uechtritz, said that the big issue for him is retaining profits and growing the model that has been put into place by the existing team. “Nothing much will change, we will continue investing in good people and new stores while monitoring our sales. We will continue with the culture we have, as it this that has delivered the growth. We also have to make sure that we retain the flat structure that has allowed us to deliver constant profits.”
When asked about the dumping of GFK and recent claims that retailers were using the European company’s data to identify the lowest price points, Smart said, “Discounting has been driven by the Federal Government economic stimulus with retails having to match comparative sales from last year. This has resulted in heavy discounting. There was a lot of stock in the market and this had to be moved.”
He said, “In December they started to feel the pressure of the market so they started to discount. Where this will go to from here I am not sure.
“What drives a consumer into a JB Hi-Fi store is low-cost games, movies and accessories as well as add-ons. We also have a culture of when a consumer walks into a JB Hi-Fi store that we sell them an add-on. This applies whether they are buying a TV, PC or notebook or a gaming console. This is highly profitable for us. We drive this hard by delivering full sales data back to sales staff.”
When asked whether a move by vendors like Sony, Apple and others to sell content and accessories direct would impact JB Hi-Fi, he said, “We are always concerned about this as we are any competitor entering the market. Our customer base is made up of a lot of enthusiasts and they remain loyal. We also have our online store, which gets a lot of traffic, so we can always sell content online. We are doing it now and we are very successful at it.”
He added, “A lot of other people will suffer before we do when vendors start selling direct.”