EXCLUSIVE: JB Hi-Fi CEO Fears Election Slowdown Over Inflation
Terry Smart, the Group CEO of JB Hi-Fi and The Good Guys, claims that he is more worried about a Federal Election slow down, than the potential of an inflation slowdown, though he does admit that retailers are benefitting from the $120 billion in savings that consumers have amassed during Covid lockdowns.
Smart revealed earlier today, that heightened consumer demand and strong sales growth had helped bump up performance at both JB Hi-Fi and The Good Guys.
Recently, UBS economists reported households have amassed an extra $120 billion in deposits since the pandemic first struck – an average of $6000 per adult with retailers such as JB Hi Fi and The Good Guys now working to attract a share of the consumer dollar.
For the period 1 January to 23 March 2022, The JB Hi-Fi Australia business was the star of the show, with comparable store sales up 10.5% during the period.
This led to total JB Hi-Fi Australia sales growing 11.3%, in the current quarter to date.
Total JB Hi-Fi Australia sales year to date are now up 1.5%.
It was a similar story for The Good Guys business, which reported a 5.1% increase in comparable store sales and a 5.7% lift in total sales.
This has taken its year-to-date sales growth to 1%.
Another positive was the improving performance of the JB Hi-Fi New Zealand business.
After posting sales declines during the first half, it has bounced back and has delivered a 2.9% lift in comparable store sales, and total sales so far in the third quarter.
As a result, the JB Hi-Fi New Zealand business’ sales are now down 2.5% year to date.
In the current quarter to date, Good Guys saw like-for-like sales rose 5.1 per cent, with total sales rising 5.7%.
JB Hi-Fi New Zealand same-store sales and total sales increased by 2.9 per cent.
JB Hi-Fi Australia stores saw like-for-like sales grow 0.9 per cent, up 0.5 per cent for The Good Guys and down 2.5 per cent for JB Hi-Fi New Zealand.
During an interview with ChannelNews, Smart said that The Good Guys in particular was benefitting from a reshaping of the business, with premium appliance brands still in demand.
He said that as a result of consumers being free of COVID restrictions there is a flight back to stores. “We are seeing heightened demand and we believe it will continue.
“At JB Hi Fi the business is seeing demand for home office products. We are also witnessing a flight to premium brands”.
He added: “We are also seeing a focus by consumers on the home with good appliance and home office sales as well as demand for TVs.”
“Everyday stock levels are improving” he said.
On the question of stores and the importance today of giving the consumer a “good instore experience” he said:
“We are constantly evolving our stores and we are experimenting with new layouts; we are also conducting extensive research into what consumers expect from us.
On the question of the next quarter, and the fact that 2022 is an election year, Smart believes that there is an abundance of money in the economy that will stimulate sales for retailers.
Analysts believe that the next Federal budget, announced next Tuesday, will also deliver a new round of cash for consumers that retailers will benefit from.
In a statement to the ASX this morning, JB Hi Fi management said: “This sales growth, combined with disciplined cost control, and stock availability and sales mix benefits in gross margins, particularly in The Good Guys, drove strong operating leverage across the Group.”