Retailers Bicker In Stoush Over Effect Of Falling $A
JB Hi-Fi chief executive Terry Smart told the AFR today that the market may not allow price rises. “In the past few days we’ve seen – from some of the major manufacturers – TV prices being repositioned and actually dropping around 10 per cent from previous tickets,” Mr Smart said. He added that competition between manufacturers is fairly fierce and that competition will ultimately decide the price.
Ruslan Kogan, founder of online retailer Kogan, told BRW magazine last Friday that the claims by Harvey are unsubstantiated. “When the Australian dollar was high, Gerry was whingeing that people are buying too much from overseas. When it plunges, Gerry whinges that prices will go up,” Kogan told BRW. “I don’t know what he wants. He has no real position on anything.?.?. only whingeing. He whinges when the dollar is up and when it is down.”
Last Thursday, when the Aussie dollar fell to a 33-month low, The Age reported Harvey as saying that because of the drop in the value of the dollar, prices would go up within about three months, by up to 10?per cent.
“Our prices will go up. Everyone’s will,” Harvey told The Age. “Suppliers will either move fast or hold out on raising their prices, but regardless, if the dollar goes down, the prices of all imported appliances will go up.”
Retailers like Kogan and Catchoftheday, told BRW there will be no changes to their prices, at least in the short term, and that any price increases by Harvey Norman should be viewed with caution.
“I think Harvey Norman is looking at some dismal numbers to end the 2013 financial year and this is an attempt at urging people to buy something at his stores before June?30,” Kogan told BRW.
Catchoftheday co-founder Gabby Leibovich says though the lower Australian dollar could potentially affect the sales of overseas online retailers such as Amazon, local online retailers are safe for now – especially companies like his that operate very lean business models.
“We all are using the same dollar here, whether we’re Myer, Kogan or Harvey Norman. If there is any change, it will be gradual over time.?.?. for everyone.”
Kogan argues the retail prices of consumer electronics have never been so good. Three years ago, a 46-inch plasma screen television cost more than $3200, and today they sell for about $439. As a result, consumers are buying more, and it is not uncommon for people to own several televisions, tablets and other high-tech gadgets.
“Yes, having the dollar sitting at $1.05 is better than 92?, but there should not be a price rise as a result,” says Kogan.
Harvey Norman’s share price closed at 2.45 cents last Friday. The share prices of listed retailers such as JB Hi-Fi have surged 76.9 per cent since January this year, while Breville has jumped 67.4 per cent, Harvey Norman only managed a 29.5% rise.