The industry has backed comments by JB Hi-Fi CEO Terry Smart that price rises are imminent due to weakness in the Australian dollar.

Smart flagged potential price rises in the industry during an analyst briefing held on 10 February following the release of the company’s half-year results.

Currency weakness against the Yen, US dollar and Thai Baht could result in price rises as soon as 1 March – with “major players lining up”, according to one supplier contacted by Appliance Retailer.

Another supplier contacted by Appliance Retailer may be making a formal statement to the market as soon as Thursday this week.

“Price rises are on the radar but nothing is confirmed at this stage,” said the head of a local major supplier of appliances and consumer electronics.

A question from Goldman Sachs consumer analyst Lisa Deng on the JB Hi-Fi investor call has set tongues wagging in the local appliance industry.

Deng’s question referenced the recent weakness in the Australian dollar and how it will affect the cost of goods sold in the future.

In response, Smart provided a very direct response: “We are starting to hear from suppliers about price rises, mainly from home appliance suppliers due to the big and bulky product. But no one has actually gone yet or called out how much prices may go up.

“The thing to remember is that we buy locally, like all of our competitors, so we are all buying from the same supplier. The whole market will go up if they decide to raise their prices. 

“Whether or not there are price increases or there is going to be an interest rate drop, there is a lot we don’t understand yet. We need to stay focused on driving value and continuing to drive that promotional activity to make sure the brands are the only choices the customers will consider – that’s all we can do. We are unsure how it is all going to play out.”

When asked about rate cuts, Smart said he expect this will be a positive for the business and the overall retail sector.

“It becomes a positive for retail in general, and if it is positive out there and consumer sentiment improves, that continues to be good for us,” he said.