e equity to public company transition in the retail industry. The first quarter sales update by JB Hi-Fi CEO, Richard Murray, should have drawn more positive commentary, given the doom and gloom predictions of a tough Christmas trading period ahead. Murray has pointed out that some of the slowdown in growth was the result of product release schedules in the comparable quarter in 2016. A reported slowdown in whitegoods and furniture would also have taken some wind out of the retailer’s sails, but a key factor is the cycling through of the electronic category sales of the collapsed $1 billion plus Dick Smith business. The cycling of sales from category expansion in the JB Home stores is another factor in the quarter. While market analysts might have been miffed by the reported growth levels, Murray told the company’s shareholders that sales growth remained in line with expectations with the moderated growth explained by key product release dates and the elevated sales gains of the same period last year. Murray is certainly not pessimistic about business conditions in the current financial year, even with what he expects to be very competitive conditions in the lead up to Christmas with retailers driving for market share. Murray also remains very bullish about the prospects of The Good Guys chain, which was acquired in November 2016 and is now led by Terry Smart. Market analysts believed The Good Guys should have produced stronger growth in the latest quarter, but a 3.1 per cent gain in total revenues and a 2.4 per cent lift in comparable sales is a reasonable result for a business that is being integrated into the JB Hi-Fi structure. Murray is expecting sales of $4.65 billion for JB Hi-Fi in the for FY18, representing a $500 million single year increase in revenues from the chain’s 200 plus stores. The Good Guys is expected to tip in $2.15 billion in sales for the current financial year to lift group revenues to around $6.8 billion. Murray is not flinching over the potential threat of Amazon’s physical entry into the Australian market, with JB Hi-Fi maintaining an aspirational target of $500 million of additional sales, not just this financial year, but into the future. The confidence is not entirely surprising, given the strength of the JB Hi-Fi brand, the cost disciplines that have been a hallmark of the retailer’s success and the fact online competition in many of its product categories has been part and parcel of its business for many years. In the online retail space, JB Hi-Fi has developed one of the best platforms and increased online sales by 38.4 per cent to $158.9 million in FY17. Online sales now account for close to four per cent of the retailer’s total revenues. JB Hi-Fi is a retailer that does understand its business better than most and, as chairman Greg Richards noted, has a culture of embracing change, regarding change as a natural part of the business. Richards said the retailer is constantly focused on innovating to ensure that it remains current and relevant to customers. CEO Murray also points to an “unwavering focus on the customer” and a passion for bringing customers the biggest brands at the best prices as a key element of JB Hi-Fi’s culture. Murray says the retailer consistently references its low cost of doing business as a competitive advantage and a “key enabler of maintaining price leadership”. He also attributes the ongoing success of JB Hi-Fi to its high sales per square metre productivity and “deep relationships” with local and global suppliers. He said the company researches international trends and product development to challenge its current and future strategies, particularly as they relate to new competitors. “From price intelligence and benchmarking, delivery and fulfilment capability, digital infrastructure to customer experience, we have undertaken detailed analysis and planning and are confident in our go to market plans,” Murray told shareholders at the company’s annual meeting. There are many addresses by chairman and CEOs of listed companies that touch on similar themes in regard to a retailer’s strategies, capability and alertness to changes in the market. You could start with a re-read of the AGM presentations of the vanquished Dick Smith that was a competitor to JB Hi-Fi in sales. The difference between JB Hi-Fi and other retailers saying all the right things to shareholders is that JB Hi-Fi actually does maintain a culture that started with a single shop in Melbourne selling music at discount prices, a culture that private equity owners did not tinker with and that has been factored into the development of different store models and expansion into new product categories. SRG: It’s game on While there have been warnings of likely profit downgrades by a number of retailers listed on the Australian Stock Exchange and forecasts of a challenging Christmas trading period, another consistent performer has reported solid growth for the first quarter. Super Retail told shareholders at its annual meeting that first quarter sales across its three divisions were all showing five per cent plus growth as the chain looks to the crucial Christmas period. The auto retailing division has been tracking at six per cent above 2016 sales with comparable store growth of four per cent, while the leisure retailing division has posted increases of seven per cent in total sales, albeit with a more modest two per cent gain in like for like revenues. Similarly, the sports retailing division has achieved sales growth of five per cent in the first quarter with a more subdued two per cent comparable store growth figure. Peter Birtles, Super Retail Group CEO, told shareholders the retailer had made a positive start to the year with the businesses delivering profitable growth in line with budget expectations. “Although like-for-like sales growth has been slightly dampened by the subdued consumer environment, we continue to generate sourcing and supply chain efficiencies and are maintaining strong operating cost control across the group,” Birtles said. Like JB Hi-Fi, Super Retail Group believes it has strategies in place to meet new competitors entering the market. Super Retail Group has continued to post relatively strong growth, although some of its acquisitions have been a drag on results over a number of years. Robert Wright, Super Retail Group chairperson, said concern about new competitors in the market had dampened the retailer’s share price in recent months. However, the business is continuing to evolve to compete in the changing retail market that includes new international online and bricks-and-mortar competitors, changing consumer expectations and behaviours, digitisation and new technologies. Wright said restructuring and transformation initiatives undertaken in the past two years had contributed to a strong result for the retailer. He told shareholders the retailer had a keen focus on innovation that was exemplified by the new retail concept store that recently opened in Penrith, New South Wales and integrates digital elements into the store environment for a more engaging customer experience. While Super Retail Group has had some challenges with several acquisitions, it has continued to develop its capability in supply chain and has had some successful store models, particularly with Boating Camping Fishing (BCF) and within the auto retailing division. The acquisition of the Rebel Sport business has performed strongly within the group from the outset and, as part of the Super Retail Group’s ongoing restructure, it has now completed the rebadging of Amart stores to the Rebel brand. Confident of the future, Birtles told shareholders the historical levers of range and price were no longer sufficient to ensure growth and the challenge for retailers is to build a stronger emotional connection with customers.