JB Hi-Fi allows customers to haggle in-store: 'Take the deal'
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In the world of retail, the price tag is often seen as the final word.
But what if we told you that at JB Hi-Fi, one of Australia's largest home entertainment retailers, the price tag is just the starting point?
Yes, you read that right.
The art of haggling, often reserved for bustling markets overseas, can now be put to use right here at your nearest store.
JB Hi-Fi's CEO, Terry Smart, recently revealed that the company has adopted a new strategy to combat falling profits and heightened competition.
The directive? Staff are being encouraged to 'take the deal' when customers propose a discount.
This surprising revelation means that customers willing to negotiate could walk away with a significant discount on their purchases.
The company's decision to embrace haggling comes after a nearly 20 per cent net profit slump in the first half of 2023-2024.
Smart attributes this to 'heightened competitive activity' and 'increased on-floor discounting'.
However, he believes that accepting a lower profit margin is a small price to pay if it means preventing a sale from going to a competitor.
'We want them to take the deal and let us (management) worry if it’s (profit margin) a bit skinnier than maybe it should be,' Smart said.
'But we would rather bank those dollars than let somebody else bank those dollars.'
'So in summary, it’s up to the staff. But it is driven just simply by how competitive the market may be.'
'If they’re (customers) going to a competitor’s store, getting a price (and) bringing it into us, we tell the staff, take the deal.'
'Move on, move to the next customer.'
This new approach is a clear indication of how competitive the retail market has become.
JB announced that total group sales were down 2.2 per cent to $5.16 billion in the six months to December 31, compared to the same period in the previous year.
Their net profit fell by 19.9 per cent to $264.3 million, which has led the company to cut its interim dividend by a similar percentage, arriving at $1.58 per share.
Despite the profit slump, JB Hi-Fi's sales momentum in January was better than expected, with a 2.5 per cent increase for JB and a 2.2 per cent decrease for the JB-owned The Good Guys.
'The stronger-than-expected result continues to highlight JBH’s good performance in tough operating conditions,' E&P Capital Retail Analyst Philip Kimber said.
The company's sales in Australia were up by 0.7 per cent to $3.62 billion, driven by demand for mobile phones, games hardware, small appliances, white goods, and services.
However, sales at The Good Guys dipped by 9.9 per cent to $1.39 billion.
In New Zealand, JB Hi-Fi sales were up by 5.1 per cent to $168.7 million NZD ($159 million AUD), but same-store sales were down by 1.2 per cent.
The group ended 2023 with a net cash of $488 million and with plans of opening three to give stores each year in New Zealand over the next three years.
What are your thoughts on this new strategy by JB Hi-Fi? Have you ever haggled for a better price at a retail store? Share your thoughts and experiences in the comments below.
But what if we told you that at JB Hi-Fi, one of Australia's largest home entertainment retailers, the price tag is just the starting point?
Yes, you read that right.
The art of haggling, often reserved for bustling markets overseas, can now be put to use right here at your nearest store.
JB Hi-Fi's CEO, Terry Smart, recently revealed that the company has adopted a new strategy to combat falling profits and heightened competition.
The directive? Staff are being encouraged to 'take the deal' when customers propose a discount.
JB Hi-Fi customers can now haggle in-store. Image source: Shutterstock.
This surprising revelation means that customers willing to negotiate could walk away with a significant discount on their purchases.
The company's decision to embrace haggling comes after a nearly 20 per cent net profit slump in the first half of 2023-2024.
Smart attributes this to 'heightened competitive activity' and 'increased on-floor discounting'.
However, he believes that accepting a lower profit margin is a small price to pay if it means preventing a sale from going to a competitor.
'We want them to take the deal and let us (management) worry if it’s (profit margin) a bit skinnier than maybe it should be,' Smart said.
'But we would rather bank those dollars than let somebody else bank those dollars.'
'So in summary, it’s up to the staff. But it is driven just simply by how competitive the market may be.'
'If they’re (customers) going to a competitor’s store, getting a price (and) bringing it into us, we tell the staff, take the deal.'
'Move on, move to the next customer.'
This new approach is a clear indication of how competitive the retail market has become.
JB announced that total group sales were down 2.2 per cent to $5.16 billion in the six months to December 31, compared to the same period in the previous year.
Their net profit fell by 19.9 per cent to $264.3 million, which has led the company to cut its interim dividend by a similar percentage, arriving at $1.58 per share.
Despite the profit slump, JB Hi-Fi's sales momentum in January was better than expected, with a 2.5 per cent increase for JB and a 2.2 per cent decrease for the JB-owned The Good Guys.
'The stronger-than-expected result continues to highlight JBH’s good performance in tough operating conditions,' E&P Capital Retail Analyst Philip Kimber said.
The company's sales in Australia were up by 0.7 per cent to $3.62 billion, driven by demand for mobile phones, games hardware, small appliances, white goods, and services.
However, sales at The Good Guys dipped by 9.9 per cent to $1.39 billion.
In New Zealand, JB Hi-Fi sales were up by 5.1 per cent to $168.7 million NZD ($159 million AUD), but same-store sales were down by 1.2 per cent.
The group ended 2023 with a net cash of $488 million and with plans of opening three to give stores each year in New Zealand over the next three years.
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