The secret to JB Hi-Fi’s success

By Patrick Avenell

MELBROUNE: Amidst all the doom and gloom of the global economic crisis, JB Hi-Fi has traded resiliently, so much so that its share price has not only held up during this recession, it has seen a steady incline. Current.com.au asked JB Hi-Fi Richard Uechtritz what the secret was.

“I think for our consumers, they’re highly desirable items,” he said. “They’re spending more time at home, they’ve been saving for over a year now because sentiment’s been low, so they’ve got the capacity to spend if they want to, and a new laptop or a new games console or a new flat screen television: they’re highly seductive items.”

Since November 2008, when JB Hi-Fi’s share price bottomed out at a sub-$8 mark, the retail group’s trading line has rivalled St George Illawarra’s improvement in the NRL. There was a slight blip in February, but with consumer sentiment improving, and Australians cashed up with the Government’s largesse, JB Hi-Fi’s share price has risen to over $13.

Uechtritz explained that the consumer’s ability to justify purchases to themselves has been a key factor.

“You can always cost justify why the family should need new [products] if you’ve been saving, if you’ve cut back in other areas.

“Consumers in Australia do have the capacity to spend, they just don’t want to because sentiment is low.”

It may have been the case that consumers didn’t want to spend previously, but if JB Hi-Fi current trend continues, the retailer groups may have already survived the worst of this recession.

Leave a Reply

Your email address will not be published. Required fields are marked *

*