Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
The shift to working and learning at home by Australians during the pandemic has enabled some retailers like JB Hi-Fi to surf through the worst of the COVID-19 crisis.
Retail spending has been extremely volatile this year as consumers first started to hoard as coronavirus burst onto Australian shores, then went into lockdown as infections started to spread.
The June quarter saw the biggest fall in retail spending since the introduction of the GST 20 years ago, recording a 3.4 per cent decline.
Yet the JB Hi-Fi retail home entertainment group, which has stores in Australia and New Zealand and includes The Good Guys whitegoods retail chain, scored a 21 per cent rise in profits in the 2019/20 financial year of $302 million.
Its results reported on Monday showed sales for the year rose 11.6 per cent to $7.9 billion.
JB Hi-Fi says Australian sales accelerated from March as customers spent more time working, learning and seeking entertainment at home.
Consumer confidence, a pointer to future spending, is weak in the face of the rising death toll from COVID-19. A slump in wage growth to its slowest pace on record – at a time of high unemployment – will not have helped the mood.
But the rate of inflation has also seen its biggest quarterly drop since records began 72 years ago and households are gaining some benefit from lower petrol prices or not using the car at all.
“Filling up the car with petrol is the single biggest weekly purchase for most families. Or at least it was,” Commonwealth Securities chief economist Craig James says.
“With more working from home, some families may be saving a few dollars each week by not having to commute to and from the office.”
According to the Australian Institute of Petroleum, the national average price of unleaded petrol fell by 4.8 cents to 117.8 cents a litre last week.
This time last year pump prices were near 140-145 cents a litre.
“The relatively good news on petrol prices is supporting spending, with online purchases leading the way,” Mr James said.
This was certainly the case for JB Hi-Fi, which saw online sales jump 48.8 per cent to $597.5 million in 2019/20, representing 7.5 per cent of total sales.
Online shopping site Kogan also reported a 55.9 per cent jump in its full-year profits.
JB Hi-Fi shares were trading 5.5 per cent higher at $49.95, bucking the trend of the overall market, with the S&P/ASX 200 share index down 0.8 per cent at 6074.5 in late afternoon trading.
Retail competitor Harvey Norman was also trading five per cent higher at $4.30 ahead of its results at the end of the month.