The head of electronics giant JB Hi-Fi has warned that certain categories of consumer goods could see prices rise by 8 per cent on average as supply chain issues force suppliers to up the price of their goods.
Terry Smart, JB’s chief executive, told The Age and The Sydney Morning Herald the company was starting to see higher prices being passed through from suppliers, specifically for home appliances.
JB Hi-Fi Group chief executive Terry Smart says sales have stayed strong.Credit:
“We buy from the local suppliers who import the products, and they’re the ones who have been bearing this increased supply chain cost,” he said. “They’ve been absorbing that, and now they’re getting to a point where they’re going to pass that on in the form of a price increase.”
“Broadly, that’s around 8 per cent [higher].”
Mr Smart said JB Hi-Fi would absorb some of those costs where possible, and that the current competitive market would mean discounts would still be applied. However, customers should still expect to pay more for appliances, though he noted prices for consumer electronics had remained stable.
On Monday, JB unveiled its half-year earnings, with the business reporting net profit after tax of $287.9 million for the six months to the end of December. This was a 9.4 per cent decline on last year’s record half-yearly profits but still above market expectations and in line with guidance given by the business earlier this year.
Sales at the major retailer also fell slightly, down 1.6 per cent to $4.86 billion, however, online sales continued to grow, rocketing up 62 per cent for the half to over $1.1 billion. The segment now makes up nearly a quarter of JB Hi-Fi’s total revenue.
JB has been a major beneficiary of the varied trading conditions brought about by the pandemic, with shoppers requiring consumer electronics and home office equipment throughout COVID-19.
Mr Smart also announced the retailer would return $250 million to shareholders via an off-market share buyback alongside an interim dividend of $1.63, with a total of $437 million in capital being returned to investors.