Beginning in some labels began to package mini CDs in 12cm slimline cases. Some singles packaged in 5" single jewel cases contained a 5" CD adapter.
Electronics retailer JB Hi-Fi has also suffered a hit to its bottom line.
The market was relieved the result wasn't worse. But investment analysts say the company's key competitive advantage of running a low cost business is now under serious threat.
David Taylor has our report. There appears to be a glimmer of hope for Australia's retailers. After a tough it seems the cash registers have started to heat up in recent weeks. January sales were soft especially in those early weeks with JB Hi-Fi branded stores comparable growth of negative 5.
However in outlook, while it's still early we have seen improvements in February sales which for the month to date for JB Hi-Fi branded stores have grown 8. The hope is the some of that trading momentum will remain for the rest of the financial year.
The market certainly liked the result, or put another way, it was expecting something significantly worse, a profit a little over half what was actually achieved. So it's not all bad and the result was broadly in line with expectations.
And that's the sort of thing the market likes. And that explains the 40 cent jump in the share price this morning. Investment analysts though argue the deterioration in the retailer's bottom line highlights the squeeze faced by many retailers at present.
Roger Montgomery from Montgomery Investment Management: The market currently is focusing on a 5. And what does that tell you? Well it tells us that operating a retail business in Australia is getting tougher. Margins are getting lower, margins are being squeezed and there's not enough growth in sales to offset the increase in costs.
Roger Montgomery says JB Hi-Fi has been successful in attracting consumers looking for low prices but fears it's those tech-savvy customers that are now likely to go online for an even better deal. The internet is fast becoming, it's certainly growing the fastest in terms of sales as a channel.
And it's still only a very small part of retail sales in Australia so it's got a long way to go. That low cost model that JB Hi-Fi has been working so hard to achieve over the last few years may be coming to an end? Well I think their target audience is pretty internet savvy and they know that JB Hi-Fi doesn't provide the lowest prices on products.
You can get products cheaper elsewhere. And it's very hard, if your unique selling proposition is that you provide, you are offering the lowest prices and you're not offering the lowest prices anymore then what is your unique selling proposition?
And their target audience are very adept at using the internet to dig out bargains and the bargains are being found elsewhere. Another factor hitting the retailer's profit was an interest charge on debt it had used to initiate a share buy-back. At midday in the east shares in JB Hi-Fi were 2.The primary goal of this report is to provide an analysis of the company JB Hi-Fi.
In particular the report highlights the industry trends of the consumer electronics retail market as well as focusing on how JB Hi-Fi’s segmentation, targeting and positioning strategies.
JB Hi-Fi Limited is a Public Company that is ranked number 56 out of the top companies in Australia. The company generates the majority of its income from the Other Store-Based Retailing in Australia industry. This is a list of notable companies based in Australia, a country in vetconnexx.com further information on the types of business entities in this country and their abbreviations, see "Business entities in Australia".Australia is a wealthy country; it generates its income from various sources including mining-related exports, telecommunications, banking and manufacturing.
Despite the strong outlook, JB Hi-Fi shares fell almost 4 per cent to $ on Monday after Australia's largest consumer electronics retailer failed to meet the most optimistic market forecasts.
JB Hi-Fi has set an ambitious goal for its JB Hi-Fi Home store concept, announcing that there is the potential to grow the number of stores in Australia to 50 within the next three years.
The target is to have 75 Home stores sometime in “Each new JB Hi-Fi Home store contributes to growing our customer awareness, market share and supplier support,” says Murray.