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JB Hi-Fi Smashing It Online As Competitors Struggle To Match Traffic

It’s not what JB Hi-Fi did in the last half of 2022 when pre-holiday spending and Black Friday sales drove growth. With preliminary unaudited sales for the first half of 2023 up 8.6 per cent to $5.278bn, earnings grew 14 per cent to $479.2m, and sales online are also up.

We are now heading into a totally different six-month trading period, with several retailers telling ChannelNews sales have slowed, and specialist dealers are reporting a “very quiet” first two weeks of the year, though several analysts are tipping a soft-landing Vs a retail “Wipeout”.

The strong trading update reported today pushed JB Hi-Fi shares up 5.6 per cent to $49.72. During the past six months JB Hi-Fi shares have risen over 18 per cent, with store makeovers and new locations for stores also driving significant increases in traffic.

The mass CE and appliance retailer said that second quarter same-store sales growth at its Australian business was up 4.9 per cent, while JB Hi-Fi New Zealand sales were up 9.8 per cent and The Good Guys sales for the quarter better by 3.3 per cent.

A classic example of how the business is growing share by getting better productivity from their stores can be seen at the Company’s Pacific Fair store in Broadbeach Queensland, where a move to a new location in the same shopping mall delivered better foot traffic that in turn drove a “significant” increase in business.

Online, JB Hi-Fi and The Good Guys have significantly outperformed their competitors online.

Online sales across the board accounting for 14.2 per cent of all sales, totally $752.1 million.

In December, JB Hi-Fi and The Good Guys online operations outperformed almost every other retailer competing in the CE and appliance markets, with nearly 40 per cent of the Australian population of 26M visiting the JB Hi-Fi website in December 2022.

The site attracted 20.7M visits according to SEMrush online data from 10.2M unique visitors. The Good Guys site attracted 7.1M visits from 4.1M unique visitors.

In November, JB Hi-Fi attracted more than 22M visitors to their website.

In comparison, in December 2022 Harvey Norman only managed to attract 6.9M visits from 4.2M unique visitors.

Their closest rival was Kmart, which is more fashion than appliances. They got 15.5M visits from 8.1M unique visitors.

Big W got 10.9M visits from 6.3M consumers.

The average time spent on the JB Hi-Fi website by visitors was 8.52 minutes. Also impressive was the volume of traffic that went direct to the JB Hi-Fi website. 

“We are pleased to report record sales and earnings for HY23, as trading conditions started to normalise following two years of COVID-related disruptions,” says CEO Terry Smart.

“Our relentless focus on providing the best value and high levels of customer service every day, both in store and online, continues to resonate with our customers.

“As always, a key part of our continued success is our over 13,000 team members and their passion and dedication to looking after our customers’ needs. I would again like to thank them for delivering this outstanding result.”

The big task now for JB Hi-Fi is growing sales and controlling stock levels during the last six months of the year.

Australia’s economy was resilient towards the end of last year, with job vacancies and retail sales holding up, even as monetary agencies slashed the outlook for growth in 2023.

Data for November, released by the Australian Bureau of Statistics (ABS) on Wednesday, showed consumer price inflation picked up in the month while the number of firms advertising for staff increased and consumers set fresh records for retail spending.

Consumer prices rose 7.3 per cent in the year to November, up from a 6.9 per cent rate in October, or slightly quicker than economists’ forecasts, with the potential for price falls or profit taking kicking in as the Australian dollar climbs to $0.70.

This week the US dollar started to collapse under the weight of the market anticipating a less hawkish Federal Reserve response later this week.

This could be good news for consumers and suppliers.

Positive sentiment toward risk assets ballooned, with the prospect of China coming back online to boost the global economy. Industrial metals soared, further underpinning the Aussie dollar which is tipped to hit $0.75 by June 2023.

The trade surplus for Australia in November came in at a colossal $13.2 billion, well above estimates of $11.3 billion and better than $12.2 billion previously.

The surge in iron ore, copper, gold, aluminium and nickel will further add to the bottom line of the domestic economy, with retailers tipped to see a slowdown in spending but not the dire turndown that several analysts and media organisations have predicted.

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