Betta’s plan to handle the threat of JB Hi-Fi incursion

Exclusive by Patrick Avenell

SYDNEY: BSR Group general manager Ian Brown has acknowledged the threat posed by JB Hi-Fi’s expansion into Betta Electrical’s heartland, the regional areas. Brown told Current.com.au that whilst any incursion from a competitor would affect market share, differences in the groups’ product lines should reduce the impact.

Yesterday, JB Hi-Fi CEO Richard Uechtritz outlined a number of regional locations set for the JB treatment. Some of these are confirmed, whilst others are still in the planning stage. Centres include Coffs Harbour, Port Macquarie, Orange, Lismore, Ballina, Nowra, Wagga Wagga and Albury.

In response to this news, Brown said the new opposition would have some impact on the Betta business, though he did not label JB’s expansion a threat.

“Obviously our opposition in any area will impact on our business,” said Brown. “I don’t know whether you look at that as a threat.”

Central to Brown’s optimism is his faith in a main tenet of regional retailing: the value of customer loyalty.

“Retailing in regional areas is completely different to retailing in metro areas because you have your loyal customers. If you’ve been providing your retailing in regional areas correctly, you have your database of good loyal customers, who shop with you because you’re giving them good service.

“Now obviously if they are loyal customers they’ll still remain shopping with you, whether Richard [Uechtritz] opens one of his JB stores or not.”

When asked if he thought new JB Hi-Fi stores would directly affect existing Betta stores’ market share and profits, Brown was contemplative.

“Wherever they go they’re going to get a chunk of market share, without a doubt, because of the style of business they’ve got. But JB Hi-Fi has a fairly different product range to us: we don’t sell the software, we don’t sell the music, we don’t sell the games and…our biggest category is whitegoods and JB certainly don’t handle that.

“JB without a doubt will have an impact on us, not as much as some of our other opposition would.”