By Patrick Avenell
While electronics products at JB Hi-Fi and Harvey Norman have become slightly more competitive, prices for comparable products are rising at Dick Smith Electronics (DSE), according to research conducted by Credit Suisse.
Since Anchorage Capital Partners purchased the Dick Smith store network from Woolworths in 2011, prices have been rising, though the store remains the most ‘price competitive’ of the three retailers surveyed.
“We observed incremental price increases across multiple categories at Dick Smith Electronics,” said Credit Suisse analyst Grant Saligari. “There is some uncertainty as to DSE’s pricing tactics due to its recent ownership change. These tactics will be an important influence on sector profitability.”
Sources close to Dick Smith’s major suppliers have told Current.com.au that since the new owners assumed control, product ordering has been stagnant. Insiders at Dick Smith have said the focus on house brand products sourced directly from China is increasing. Current.com.au has contacted Dick Smith for comment.
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Of the three major nationwide electronics retailers, Harvey Norman is the most expensive, noted Saligari.
“Harvey Norman is the most expensive retailer in our sample,” he said.
“Accessories are its least competitive category. Its price differentials relative to other retailers have grown following discounting in the category by JB Hi-Fi.
“Harvey Norman is competitive in tablet pricing, largely through the pricing of iPad products.”
Saligari found that tablet pricing was the most stable across the three retailers, mostly due to the market dominance of Apple’s iPad range, which has famously eluded price discounting since launching in early 2010. Further assisting price stability in this category is the comparable paucity of online retailers selling iPads.
“Tablets remain [JB Hi-Fi’s] most competitive category, much of which is driven by a limited supply of iPads from online retailers in our survey.”
In other categories, pricing of cameras and MP3 players have increased slightly in early 2013 while accessories have continued its steady decline from mid-2012.