Narta chief executive Michael Jackson has said the decision by JB Hi-Fi Group to end its membership of the buying and services organisation was mutually agreed, and that no event, incident or disagreement caused the split. In his first public comments since the move was announced, Jackson said the two sides had concluded a few weeks earlier that Narta should concentrate on its member strategy while JB Hi-Fi pursued its own corporate priorities. He added that JB had not been asked to leave.
JB Hi-Fi Group’s membership had lasted more than 25 years. Jackson said that when JB joined, it operated a store in Melbourne and a store in Parramatta, and its growth into a large publicly listed company could not have been foreseen. Narta, which is 61 years old, was founded to serve independent retailers, and Jackson said it was proud to have played a part in JB’s development.
The acquisition of The Good Guys and its later inclusion in Narta changed the balance of the organisation, according to Jackson. It added scale but also created a significant imbalance across the membership. The COVID-19 period then overshadowed some of those underlying changes as the industry enjoyed several years of extraordinary growth, he said.
Jackson argued that market conditions are now different. Over the past six months, he said, Narta has recognised a greater responsibility to its shareholders and total membership. The group has invested in services that go beyond buying, including forecasting, stock visibility, end-of-life management, new model implementation, product content and training, predictive analytics, AI and automation.
Those services are intended to help independent members compete with major retailers including JB Hi-Fi, Harvey Norman, Bunnings, Woolworths, Big W, Costco and Amazon. Jackson said independent businesses need to work collectively to access the technology, services and investment required to remain relevant.
He said discussions with Nick Wells had led JB to agree that Narta had taken the right path over the past five to six years by building its service infrastructure. Without those investments, Jackson said, Narta could have struggled to meet its responsibilities to members.
The loss of JB’s scale will affect Narta’s income and operating costs. As a not-for-profit organisation whose members contribute to running costs, Narta will need changes to its structure and cost base. Jackson acknowledged that difficult decisions lie ahead, including redundancies and cost reductions across the board and executive structure. He said the priority is to keep Narta financially sustainable and retain the experience and capabilities needed to serve members and suppliers.
Member engagement and supplier pressure
Jackson said suppliers want a strong independent retail channel and understand the importance of choice, competition and balance in the market. He added that suppliers’ cost to serve continues to rise because of the economy, operating costs and market conditions, increasing their expectations of the channel. Since the announcement became public, Jackson said Narta had received an overwhelming response from suppliers over the previous 24 hours.
Narta will no longer be the largest buying group, Jackson said, but collectively it will remain number three. He described that as a significant market position that carries value for suppliers and independent retailers.
He also said the challenge is clear: Narta has built a comprehensive set of services, but members must connect, work together and actively use them to maximise the group’s collective potential. Jackson said the organisation’s purpose has not changed and that a strong, connected and commercially effective independent channel is needed more than ever.