Narta CEO Michael Jackson has spoken publicly for the first time since JB Hi-Fi Group announced it will end its membership in the buying and services organisation, describing the split as a mutually agreed step rather than the result of a dispute. He said no event, incident or disagreement caused JB Group to leave, nor had JB been asked to leave. The decision, he added, allows both organisations to concentrate on their respective strategies.
Jackson said Narta remains a substantial business without JB Hi-Fi Group. Core-supplier purchases are well over $1 billion, and the group’s members collectively account for more than 20% of the consumer electronics, camera and home appliance market. He argued that Narta’s value goes beyond buying power: it brings independent retailers together, creates efficiencies, reduces administration and costs, and lowers the investment individual businesses must make.
Narta is 61 years old and was built around serving independent retailers, Jackson said, with collective scale intended to help them compete against major retailers. He recalled that JB joined more than 25 years ago with one store in Melbourne and one in Parramatta and said no one could have predicted its growth into a large public company. Narta, he said, was proud to have been part of that journey.
The acquisition of The Good Guys and its later incorporation into Narta brought considerable scale but also created a significant imbalance across the membership, according to Jackson. The COVID period then overshadowed many of those underlying changes as the industry experienced several years of extraordinary growth, with businesses and the wider sector focused on how well things were going.
Jackson said the market is now very different and that over the past six months Narta has recognised a greater responsibility to its shareholders and total membership. He listed services including forecasting, stock-on-hand visibility, end-of-life management, new-model implementation, product content and training, predictive analytics, and AI and automation. Independent members, he said, need these capabilities to survive and thrive against major retailers including JB Hi-Fi, Harvey Norman, Bunnings, Woolworths, Big W, Costco and Amazon.
According to Jackson, JB agreed that Narta had taken the right path over the past five to six years by investing in and building its service infrastructure. With JB’s departure, he said, members must embrace the importance of that investment, work together and fully engage with the services to deliver value collectively. Suppliers want a strong independent channel that can demonstrate efficiencies and a competitive cost to serve, and Narta will be judged by its collective actions over the next 12 months.
Jackson said suppliers had told Narta that their cost to serve continues to rise, with the economy, operating costs and market conditions affecting them as much as retailers. He also pointed to JB’s position as a publicly listed company with four businesses — JB Hi-Fi Australia, JB Hi-Fi New Zealand, The Good Guys and e&s — and its own strategic priorities.
Although there was never going to be a perfect time to end the membership, Jackson said the two sides agreed a few weeks ago that Narta should focus on its strategy and members’ needs while JB focuses on its own priorities. Since the announcement became public, he said, the response from suppliers has been overwhelming, reflecting their desire for a strong independent retail channel and for choice, competition and balance in the market.
The challenge for Narta is to ensure members are connected and actively using its services. Jackson acknowledged that Narta will no longer be the largest buying group but said it will collectively remain number three, a position he described as significant for suppliers and independent retailers. The loss of JB’s scale will affect Narta’s income and operating costs, and as a not-for-profit whose members contribute to running costs, it will require changes to its structure and cost base.
Jackson said difficult decisions will include redundancies and cost reductions across its board and executive structure, while emphasising that the experience of its leadership team, board and people remains stable. He said Narta’s priority is to remain financially sustainable, retain the capabilities needed to deliver for members and suppliers, and be structured appropriately for the future. Its purpose, he added, has not changed: strengthening independent retail, which he believes is more necessary than ever.