Despite numerous reports that JB Hi-Fi is one of few large Australian retailers that are bucking the trend, it too is also now admitting to feeling the pressure of the struggling retail sector.
The company announced that sales growth for the first month to 30 November 2011 for its JB Hi-Fi branded Australia and New Zealand stores of 7.8 per cent and comparative store sales of -1.8 per cent.
However, Terry Smart, JB Hi-Fi CEO, said while sales in the sector improved it was still not enough to counter the impact of the first quarter decline in sales and margin driven mainly by high discounting levels, with some retailers pricing inventory below cost to drive foot traffic and/or clear excess inventory.
As a result, the company expects an EBIT for the first half year 2012 to be around 5 per cent below its first half year last year.
Smart also highlighted that the TV panel category has continued to see price deflation per price unit at 20 per cent to 25 per cent on a year on year basis.
“The market remains challenging but we continue to gain market share, leveraging our highly productive stores and a low cost structure. Our unique proposition provides consumers with not only low prices but also an entertaining and engaging shopping experience,” Smart said.
“Consolidation in the consumer electronics and home entertainment sector is inevitable and is likely to accelerate over the short term with JB Hi-Fi a likely primary beneficiary from this trend. Combined with our new store roll out program, we should continue to enjoy total company sales growth and entrench our position as a leading retailer in this sector.”
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