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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: First area of the store that needs to go...
By Flunk on 4/15/2011 1:58:31 PM , Rating: 1
My experience with Monster cables is quite the opposite. The Monster cable is about $250 and the standard one is $4.99 (although I got it on sale for $2.99). Both produced HDMI picture and sound that were indistinguishable.

Luckily my idiot friend had the receipt and we returned the Monster cable to the store for a full refund.

Monster cables might be a bit nicer than the standard ones but it doesn't justify (in my exact case) 5,000% markup. They can't possibly cost that much more to make, even if they have twice the copper that would only double the cost.


RE: First area of the store that needs to go...
By mcnabney on 4/15/2011 4:52:02 PM , Rating: 2
I just want the B&M stores to carry current products for at least reasonable prices.

I went in to a BB a month ago to buy GTX560ti video card. They didn't have them, nor did BB.com. They could sell me a GTX460 for the MSRP of the 560ti. I checked out their other video cards, many of them 2+ years old and they still had the original MSRP. They still had HD4XXX cards for over $100. But nothing new and nothing even close to a typical sale price.

I had a gift card to spend so I used it to buy a nice Logitech mouse/KB that are almost always sold everywhere for MSRP. At least I wasn't being ripped off. I guess BB is just for suckers. The modern equivalent of women getting ripped off by an auto mechanic.


RE: First area of the store that needs to go...
By taisingera on 4/15/2011 9:10:23 PM , Rating: 2
I would get rid of the CDs and DVDs section since few buy physical media anyway. I would like to see them cut the audio video accessories, but I guess as others have stated that it is too much of a cash cow for them. They can keep the computer section, like laptops, but get rid of all the upgrades (video cards, hard drives, keyboards, mice, speakers) because average joe isn't buying these, and tech guys buy them online. Does BB really need to sell appliances? So many other stores sell them, like Sears, Walmart, Home Depot, Lowes, & Target.


RE: First area of the store that needs to go...
By cmdrdredd on 4/17/2011 9:18:15 PM , Rating: 3
You gotta keep the Movies because while you can download and own a CD quality MP3 you CANNOT download and own a full DVD. No not just the movie. i want the extra content, dev commentary. Then Blu-Ray...you telling me I can download a full 50GB 3D Blu-Ray with lossless audio online and make it playback on my Home Theater? Yeah...it won't happen soon. Not if comcast and others keep up with their bandwidth limits on their unlimited plans.


By tng on 4/19/2011 11:27:25 AM , Rating: 2
quote:
a CD quality MP3
Huh?

Have the MP3 format changed in the past several years? I can't get a MP3 that uses anything over 320Kbs. Last I heard a standard CD is using about 705Kbs. Which makes a MP3 far from CD quality. I know that you probably can't hear a difference, but if all you do is listen to a IPod with in-ear speakers you wont hear it.


By Ammohunt on 4/18/2011 2:30:48 PM , Rating: 2
I bought a dishwaser from BB no one lese had what i wanted at the price they were offering.


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