Best Buy Falling Quickly

Best Buy is trying to win the market back from its rivals, especially Wal-Mart and Amazon.  Best Buy, the largest electronic retailer in the U.S., is planning to shrink the number of retail outlets by 10% in the coming several years, this they hope will save them $70 million annually.  They are also trying to expand their online presence, hoping to compete with Amazon.  Investors are concerned about Best Buy’s huge stores with its massive overhead costs when consumers are really only buying all of their electronics online.  Best Buy is extremely pricy and most consumers would rather pay online prices with shipping then pay drastic prices for electronics that are at their fingertips.  The demand for electronics is very high, but the demand for cheap electronics is higher.  Best Buy has announced store sale declines for 3 straight business quarters and are having the same decline in sales in the current business quarter.  Chief Executive, Brian Dunn, told investors and analysts that “the online channel is our greatest growth opportunity.”  Best Buy says that it is trying to avoid being put out of business like their rivals, Circuit City, who went out of business in 2009.  Best Buy is putting all of its faith in mobile stores.  They plan to have 200 mobile stores by July 4^th and have up to 800 within the next 5 years.  In the next 3 to 5 years they are also planning on doubling its online business, which is currently a $2 billion online business.  Best Buy is also enlarging its video game and appliances in stores.  They are also selling and buying used games to make an extra profit.  Best Buy is planning to try different price strategies and Dunn said “The name of our enterprise is 'Best Buy' and we fully intend to live up to that name.”

-Analisa