nings and profit margins. But not JB Hi-Fi. The leader at the centre of this success is group CEO Terry Smart, who served as CEO of the electronics chain from 2010 to 2014, returning in 2021, after a stint leading The Good Guys, a home appliance chain within JB Hi-Fi Group’s broader portfolio. On Monday, he announced he will be retiring in October, with COO Nick Wells set to take over the top job. In today’s investor call, in which the consumer electronic retailer announced that group sales rose to 10 per cent to A$10.55 billion, Smart and Wells shrugged off questions around rising rents, overseas competition and unpredictable tariffs – the three challenges impacting almost every Australian retailer today. “It has been another strong year of sales and earnings, as we built on the momentum of the previous year,” Smart said in a statement about the company’s full-year performance. “The company stayed focused on its core proposition of driving great value and delivering consistently high levels of customer service, which continued to resonate with our customers.” So, how has JB Hi-Fi Group, a retailer that imports brand-name electronics, seemingly remained impervious to macroeconomic factors? Rising rents JB Hi-Fi Group identifies its low-cost operating model as one of its four competitive advantages. Despite operating 348 stores across Australia and New Zealand and hiring an estimated 14,000 employees, Smart has consistently balanced sales with costs. When asked how JB Hi-Fi was able to manage labour costs this year, following an increase in the minimum wage as well as annual rent increases, Wells said the team had done “a really good job of managing that cost in the second half”. Wells acknowledged that the minimum wage raise, in fact, had some operating benefits from a business perspective, including 8 per cent sales growth in the second half. He added that JB Hi-Fi Group has got its rent back to a level where annual increases are more manageable. “On renewals, we continue to be an important tenant for our landlords, so we continue to push for what we think is appropriate rent,” Wells explained. JB Hi-Fi’s low operating costs allow it to pass on greater value to its customers, which, in turn, drives sales and enables it to fend off new competitors.  Overseas competition  While some retailers are citing increased competition from ultra-low-price e-commerce platforms like Temu and Shein, JB Hi-Fi is maintaining that it hasn’t experienced that. Wells referenced the group’s model, where scale and diversification present a competitive advantage for JB Hi-Fi. The group is known for carrying the biggest and best brands. Wells explained that platforms like Temu are typically involved in categories that offer instant gratification at a low cost. “A lot of our product just doesn’t necessarily overlap with what may be on Temu, other than maybe accessories and accessory products,” he continued. Moreover, JB Hi-Fi’s brand and category diversification is designed to prevent it from being reliant on any single category or brand’s performance. Unpredictable tariffs While there has been much debate about the potential impact of US tariffs on the electronics industry, JB Hi-Fi’s leaders have shrugged off these concerns.  “Things change every day,” Smart said. “Even suppliers are just struggling to keep up with what it may mean for them when they are looking at the US [and] the different manufacturing plants. “We’re not getting any feedback that we’re going to see any benefits or, conversely, any negative impacts coming to us from this.” JB Hi-Fi Group works to maintain strong and engaged supplier relationships locally and globally to be able to navigate turbulent trading periods.