JB joins world list
Townsville JB HI- FI’S buyout of The Good Guys has propelled it into the ranks of the biggest retailers in the world.
The Australian home entertainment and whitegoods group has emerged as the 218th biggest retailer on the planet by revenue, according to research by accounting firm Deloitte.
In an annual report on the industry, Deloitte says the arrival of Amazon, a potential entry by heavyweight German discount grocer Lidl and interest from fast- growing Chinese ecommerce platforms are also set to transform the Australian retail sector in the year ahead.
“Australia is facing a number of potential disrupters which could have a significant impact on the retail landscape,” Deloitte national retail leader David White said.
“Population growth, a strong tourism market and improving wages are all set to ensure the overall retail market continues to grow in 2018.
“However, with the increase in competition from both international and domestic retailers, we can expect to see further consolidation in the sector.”
JB Hi- Fi struck a deal to buy The Good Guys for $ 870 million late in 2016, creating an electronics and whitegoods powerhouse with $ US4.2 billion in revenue last financial year.
Deloitte adjusts revenue into US dollars to allow for international comparisons.
JB Hi- Fi is only the third Australian retail business to break into the top 250 global retailer rankings.
Coles owner Wesfarmers continues to be the nation’s biggest retailer, ranking 21st globally with $ US47.7 billion in retail- related revenue for the past financial year.
Other retail businesses owned by Wesfarmers include Bunnings, Kmart, Target and Officeworks.
Woolworths, whose retail stable includes Dan Murphy’s and Big W, rose one place in the global rankings to 23rd position with $ US40.8 billion in revenue for the year to June.
Walmart in the US remains the world’s biggest retailer with $ US485.9 billion in revenue, followed by Costco, with $ US118.7 billion.
Mr White said while Amazon’s launch in Australia did not have the “big- bang” effect some were expecting, local players underestimated the US goliath at their peril.
The entry of German discount supermarket Lidl, which continues to register trademarks locally, could also not be ruled out, Mr White said.
Lidl is owned by the Schwarz Group, the world’s fourth- biggest retail group.
Schwarz also owns Costco rival Kaufland, which has bought sites in Melbourne and Adelaide ahead of an Australian launch.
“The impact of Lidl in markets such as the UK has been transformational for the sector – it’s certainly another case of wait and see,” Mr White said.
Ongoing interest from Chinese online retailers would provide local businesses with “a huge opportunity” to take advantage of the high demand for Australian products in China, Mr White said.
China’s e- commerce leader, Alibaba, opened its Australian headquarters in Melbourne early last year while rival JD. com is bulking up its workforce here.
Chinese online discount seller Vipshop Holdings has also opened its first Australian distribution centre.
“With Vipshop Holdings and JD. com making up two of the three fastest- growing companies in the top 250, they are starting to make a significant impact on the global retail market,” Mr White said.
Given only 38 of the biggest 250 retail businesses in the world operated in Australia, local retailers should brace for more arrivals, he said.
“We can expect further competition to come from international retailers,” Mr White said.
“With so much change and uncertainty in the Australian retail landscape, 2018 could be a pivotal year for many Australian retailers.”