In a move that could see Telstra compete head on with key partner JB Hi Fi, the big carrier has decided to take back control of their own retail stores.
The move comes as consumers flock to JB Hi Fi over Telstra to buy their handsets and days after Telstra axed post-paid.
Telstra has 67 Telstra owned and operated stores, with another 166 branded stores run by independent licensees and a further 104 stores operated by Vita Group Limited.
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ChannelNews understands that Telstra currently pay JB Hi Fi over $30M a year to sell their services with the big retailer stripping sales from Telstra owned and franchised stores which many consumers have told ChannelNews as being “boring locations to shop for a smartphone”.
The proposal was included in Telstra’s FY21 Half Year results announced today with Group Executive for Consumer and Small Business Michael Ackland claiming the move was required to keep pace with the growing digital economy and give Telstra more flexibility to respond to customer needs.
“This was not an easy decision given that we have enjoyed a long-term partnership with many of our licensees,” Mr Ackland said.
What has not been explained is how the carrier who has witnessed declining sales is going to turn around their sales pitch to consumers with Telstra being one of the most complained about carriers Vs high satisfaction ratings for JB Hi Fi.
Ackland said “At the height of the COVID-19 pandemic we were able to redeploy frontline staff from Telstra owned stores to assist customers through our digital channels or via the phone.
He claimed the move was also designed to further embed responsible business practices through direct employment relationships with store staff, and to have more customer service issues resolved in store.
Telstra told the ASX today that negotiations with independent licensees about an agreed transition to Telstra ownership will begin shortly and that process, which includes plans to offer roles to current store staff in the majority of cases as part of agreed transitions, is expected to continue over the next 12 to 18 months.
Carrier management claimed that the Vita Group, conversations will begin today about next steps.
Telstra expects to maintain a large retail presence across Australia while also expanding the availability to purchase and access services via its digital channels.
“We know that in many regional and rural towns, the local Telstra store is a valued part of the community providing support to a range of businesses and residents,” Mr Ackland said.
