Companies usually choose to cut off costs by firing employees to survive and as

Companies usually choose to cut off costs by firing

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under the worldwide financial crisis. Companies usually choose to cut off costs byfiring employees to survive, and as a result, the unemployment rate will go up.People planned to spend less on new generation electronic products. For example,this was not a good time for people to update their cell phones or laptops. JB Hi-Fi’stotal sales and EBIT both increased by approximately 5% annually from 2014 to2016. At the same time, JB Hi-Fi only opened 12 new stores.However, in FY2017, JB Hi-Fi acquired The Good Guy and Australian GDP raisedabout $100 billion. Total sales and EBIT of the company dramatically increased to$5.63 billion (increased 43%) and $306.3 million (increased 38%) respectively. Thenumber of JB Hi-Fi stores raised to 303. Australian GDP grew 2.7% to $1,359 billion,total sales of the company also grew 15% to $6.84 billion, and EBIT increased by14%. Growing GDP means a low unemployment rate and people are more willing tospend money on new electronic products. As a result, JB Hi-Fi’s total sales wouldincrease.2. Inflation RateInflation is a sustained increase in the general price level of goods and services in aneconomy over some time. Contrary to the trend of GDP, from 2014 to 2016, theAustralian inflation rate decreased from 2.51% to 1.28% (Statista, 2019). Because inthe process of economic recession, inflation rate usually shows a downward trend.Meanwhile, the total sales and EBIT of the company growth slightly. However, theinflation rate went up after 2016 which is a good signal, and it shows the economicenvironment became better. In conclusion, the normal range (2%~3%) of the inflationrate will promote the development of the retail industry.3. Exchange RatesThe exchange rate is the rate at which one currency will be exchanged for another. Itis also regarded as the value of one country’s currency with another currency. In thepast five years, the Australian dollar exchange rate has declined overall over the pastfive years which means Australian people have to pay more money on the sameproduct. Meanwhile, JB Hi-Fi’s purchase cost would increases when the companyimported foreign products, and it would reduce the profit of JB Hi-Fi.4. Population GrowthAustralia now has more than 25 million people from all over the world and the yearlypopulation growth rate in the past five years is about 1.35%, and more populationbrings more potential customers. The younger generation is the primary customer ofelectronic products. The number of international students in Australia has increased
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in the past few years. For example, there are almost 500 thousand Chineseinternational students in Australia and increased by 10% annually. Students usuallybuy electronic devices for studying, and personal reasons and have more desire toupdate their products. In conclusion, more population usually generate more sales inthe traditional retail industry.
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