Entertainment

Home Electronics Pricing Set To Rise

If you’re planning to upgrade your television over the next few months, you might want to act fast — JB Hi-Fi has announced plans to wind down its aggressive pricing strategies, which could see other retailers follow suit. Is the era of dirt-cheap HD TVs finally coming to an end?

JB Hi-Fi CEO Terry Smart announced the strategy on the back of the company’s half-year earnings report for 2013. Smart said that the aggressive price wars between retailers needed to end as the company looks to return to profit growth over the current financial year.

“In [2012] we saw very aggressive and unsustainable discounting going on in the market as retailers were clearing stock and trying to drive sales,” Smart explained in an interview with The Age. This contributed to a 4.6 per cent fall in profits for the company.

Smart said the industry was in a better position this year with discounting beginning to return to “normalised” levels over December and January. Subsequently, JB Hi-Fi is forecasting a full-year net profit increase of at least $4 million (for a total of $108 million), based on stabilising margins.

So does this mean an end to the huge TV discounts that we’ve all come to expect? Not necessarily, according to an ex-TV marketing manager we spoke to who wished to remain anonymous.

“The rational pricing will only stay for as long as one of the suppliers keeps stock at a minimum,” the source said. “Eventually one of them will want to chase market share again and offer up the high margins/discount support that was previously offered.

“Also it will only take one retailer to offer a large order of stock to one of the suppliers as they chase market share for the discounting to return.”

Our source also speculated that suppliers were currently running their stocks down in preparation for new technologies being rolled out at scale, such as 4k and OLED.

“A lot of new ranges are coming out post CES, so there wouldn’t be a lot of stock in the channel at the moment,” he explained.

Dwindling demand for TVs in Europe and the US could also affect future Australian pricing, he said.

“At the end of the day, there are very large, expensive TV factories running in Asia. The suppliers need to pump out a certain level of volume to keep them viable. If the European and US markets aren’t taking it, it has to go somewhere.”

In any event, it’s an interesting (and infuriating) time to be in the market for a new TV. Do you snap up a current model before the bargains run dry? Do you bite the bullet and pay a premium for the latest tech? Or is it smarter to hold onto your money and wait for the cycle to begin all over again? Let us know what you think in the comments section below.


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