By Patrick Avenell
In the latest post on his Winning.com.au blog, John Winning said it should come as no surprise that JB Hi-Fi’s performance has tailed off considering the company’s price-centric strategy.
“It has been widely reported that electronics retailer JB Hi-Fi has slumped to a 3-year low, after the chain cut its full-year profit outlook because rampant discounting has damaged margins,” Winning wrote.
“Are you honestly shocked?
“When your tag line is ‘Always Cheapest Prices’, it should be no surprise they would continue to discount against other retailers to the point of not being profitable. Price has become the only trick left as many businesses swap knowledgeable sales personnel for a cheapest price guarantee.
“JB Hi Fi is not the only store with this cheap pricing mentality: other reputable brands stand by similar slogans and fellow online retailers even use words such as ‘cheap’, ‘discount’, ‘cash’, ‘negotiate’ and ‘price’ in their taglines.
“I find these kinds of promises troubling, particularly those that incentivise negotiating or paying cash. They suggest a consumer will pay too much if they don’t negotiate, and many shoppers would rather not.”