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Changes will come in next 3 to 5 years

The world of retail electronics has changed drastically over the years. It used to be that most people were going to retail stores to make a purchase. Today, many people go into a retail store to see how a device works and research an item, then go home to purchase it online. The reasons for this are many, but much lies with the lower price that many gadgets can be found for online.

The largest consumer electronics retailer left in the U.S. is Best Buy. Best Buy is still facing stiff competition on the market with Wal-Mart, Target and other discount chains selling more electronics than they did in years past. Best Buy currently operates a number of large stores that its calls “big boxes”. These stores range anywhere from 20,000 square feet to 58,000 square feet.

According to Best Buy, these stores have huge overhead and are "white elephants" in the industry. The retail chain is looking to cut the amount of space and overhead these stores have by about 10% over the next several years. This comes after three straight quarters of same-store sales decline and a forecast for more declines in sales. The blame is placed on the Best Buy’s ailing TV business.

Analyst Scot Ciccarelli said, "I do believe that a lot of their bigger box stores have to be downsized. If there was a disappointment, I was kind of hoping they would be even a little bit more aggressive than what they outlined." He continued saying, "It's [the size reduction] not that big for this company. What I think you really need to do is maybe downsize a little bit quicker."

Analyst David Strasser from Janney echoed Ciccarelli saying, "We believe the Street wants more. We look at this as a first step that shows us the company is looking at reductions."

While Best Buy is seeing same-store sales decline, it is trying to grow it online business significantly. Best Buy wants to double its online sales from the current $2 billion over the next three to five years. Best Buy CEO Brian Dunn said, "The online channel is our greatest growth opportunity."

Dunn did note that retail was a part of Best Buy and defended its retail brick and mortar presence. He said that stores augment online. While Best Buy is looking to shrink its big box stores, it plans to increase the number of small stand-alone stores like Best Buy Mobile offerings to between 600 and 800 within the next five years.

Best Buy also has plans to grow operations in China and is pressuring U.S. lawmakers to force the collection of sales tax to help "level the market".

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RE: Fall From Grace
By M4gery on 4/15/2011 12:33:32 PM , Rating: 3
You feel more comfortable at Wal-Mart than Bbuy? I guess you must have really clean and empty Wal-Marts where you live. When I walk through my local Wally world, I feel like an Irish national taking a stroll down the streets of Compton.

RE: Fall From Grace
By lolmuly on 4/15/2011 12:48:49 PM , Rating: 2
walmarts vary drastically from place to place. It all depends on the store management. The lack of consistency speaks volumes about how much that corporation actually cares.

RE: Fall From Grace
By Taft12 on 4/15/2011 1:04:02 PM , Rating: 3
Store management has little to do with the clientele which is what the OP was talking about.

The comfort level of the average DT-poster in a Wal-mart store is strictly correlated with the socioeconomic factors of the surrounding area.

RE: Fall From Grace
By lolmuly on 4/15/2011 1:18:24 PM , Rating: 2
you are correct, however customer service has alot to do with one's comfort level in a store.

In theory the level of customer service provided by a corporation should be consistent irrespective of the local clientele, however we all know that's usually not the case.

RE: Fall From Grace
By Jalek on 4/15/2011 3:02:24 PM , Rating: 2
Personally, I like the midnight-3AM crowds. The tweakers don't block up the aisles lingering, they just grab whatever they came for and leave, paying or not, then they're out of the way. I suppose if it were drunks instead, it'd be a different story.

RE: Fall From Grace
By Hiawa23 on 4/17/2011 5:33:24 AM , Rating: 3
I don't know about the Compton comment. Did the poster mean alot of the lower class, middle class, or minorities shop & work there? Walmart is one of my favorite stores, & they are setup for everyone. I am African American, college educated, & I see nothing wrong with the clientel at any of the WM here in Florida.

RE: Fall From Grace
By Ammohunt on 4/18/2011 2:36:58 PM , Rating: 2
You need to be able to read spanish in order to shop at the Walmarts where i used to live has nothing to do with race just the area of town the Walmart exists. The one near where i work is the Walmart that never left the 80ies i routinely see guys with Mullets and shorts with no sleeves when i shop there from time to time.

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis
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