Profits at JB Hi-Fi rose 33 per cent this year as Australians rushed to buy consumer electronics amid the pandemic. While many retailers saw a lockdown-induced hike in online sales, JB Hi-Fi got an extra boost as consumers rushed to outfit their houses with electronics and equipment to work, study and entertainment from home. The company’s online sales surged by 49 per cent this year.
Overall, JB Hi-Fi saw an 11 per cent increase in total sales compared to last year coming to $7.9 billion in 2020. The company benefited from the government’s wage subsidies and cut costs with less overhead expenses due to the temporary shutting down of physical stores. They ended 2020 nicely with net profits of $332.7 million.
Despite minor setbacks with New Zealand profits, CEO Richard Murray is confident JB Hi-Fi’s growth will continue. COVID-19’s kick-started a digitalised revolution of working and studying remotely which the consumer electronics industry is hopeful will sustain long-term demand.
“This is a strong result in the most challenging of times. We are pleased to report strong sales and earnings for FY20 and importantly, we have provided our customers with the products they required as they spent more time working, learning and seeking entertainment at home,” said Mr Murray.
Mr Murray says planning for higher demand helped them meet the challenge. “At the start of the pandemic, when things were very uncertain, we increased our facilities. We made sure we had plenty of working capital for capacity and when sales are a little softer you adjust your rosters and that is why we have a good mixture of full-time, part-time and casual staff so we can be flexible up and down.ʼʼ
JB Hi-Fi’s main domestic competitor, Kogan, saw similar profit margins this year. Kogan, which operates entirely online has embraced the ‘new normal’ of online shopping.
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The company’s founder and CEO, Ruslan Kogan, firmly believes the pandemic has spurred a “retail revolution” which will have long-lasting lifestyle changes impacting how people buy consumer goods. He told the Australian Financial Review that he doubts consumers will go back to shopping in physical stores post-pandemic.