14 Feb 2012

JBHiFI low-cost model may be under threat - analyst says

6:52 pm on 14 February 2012

An analyst says there are growing signs JB Hi-Fi's low-cost model may be under threat, with consumers increasingly moving online to do their shopping.

The Australian-listed retailer on Monday revealed its first-half profit fell 9% to just under A$80 million, although sales at its New Zealand stores rose sharply.

Montgomery Investment Management's Roger Montgomery says margins are being squeezed and there's not enough growth in sales to offset the increase in costs.

Mr Montgomery says JB Hi-Fi has been successful in attracting consumers looking for low prices, but he fears it's those tech-savvy customers that are now likely to go online for an even better deal.