October 19, 2011: At its annual general meeting last week, JB Hi Fi chairman Patrick Elliot broached the possibility of parallel importing if suppliers did not offer wholesale prices which were globally competitive.
Mr Elliott (pictured left) was responding to a shareholder’s question from the floor on why Australian consumers were ‘being screwed’ when local prices were compared with prices for the same items from overseas retailers.
‘It remains open to JB Hi-Fi to import directly and effectively bypass Australian representatives of multinationals,’ he said, adding that the company would prefer not to adopt the strategy.
He said JB Hi-Fi was in a ‘constant arm wrestle’ with suppliers as customers turned to the internet to compare prices and buy goods.
‘If we have to go to a direct import model…we will.’
CEO Terry Smart added that the direct import option was not as straightforward as it might seem, but that JB would push its suppliers ‘very hard’ on pricing issues, and that the internet had made pricing transparent around the world.
Mr Smart said company store sales had fallen 3.5 per cent in the first quarter of this financial year, to the end of September, attributing much of the drop to declining sales of iPhones as consumers awaited the launch of the iPhone 4S this week.
He said he was confident about Christmas sales, and noted an increasing practice of customers ordering online and picking up goods in store to ‘jump the queue’.
‘With a high number of unique visitations – average 800,000 per week – the online site is increasingly an important sales generator for both in-store and online sales,’ he said.
He added that a new online music subscription streaming service, JB Hi-Fi Now, would be set to launch before Christmas.
Drop ‘cheapest prices’ claim – Kogan
Responding to the tacit concession that some prices were cheaper online than at JBs, the industry’s guerilla marketing, grey importing burr under the saddle, Ruslan Kogan, called on JB to drop its ‘Always Cheapest Prices’ tagline.
‘Given the acknowledgements by your chairman and CEO that prices are cheaper online, we call on JB Hi-Fi to remove your slogan, “Always Cheapest Prices” from all advertising material, and to replace it with something honest,’ stated Mr Kogan in his latest open letter to JB HiFi.
He added to Photo Counter: ‘We welcome any move by the big retailers to start using their commercial muscle and fight for better prices for Australian shoppers.
‘At their AGM last week we also saw JB Hi-Fi explain that it may be difficult to do this due to the complexity of existing relationships with suppliers. It’s time for JB Hi-Fi to sSmarten up and put their money where their mouth is!’
Commenting on his company’s venture into parallel importing Nikon and Canon cameras for online sale, Mr Kogan said: ‘We’ve had a tremendous response, with shoppers all around Australia loving the latest technology at the lowest prices. Backed by a local warranty, they’re telling us they can’t find better.’