Best Buy and Circuit City squeezing smaller retailers

Are smaller electronics retailers like The Good Guys, Tweeter and Ultimate Electronics being squeezed by the likes of the two largest consumer electronics chains in the country? Both Best Buy Co., Inc. (NYSE:BBY) and Circuit City Stores, Inc. (NYSE:CC) seem to have cornered the marketplace for things like iPods, laptop computers, and plasma TVs these days.

There are other choices on where to shop, however. An analyst with RBC Capital Markets cut his price target on Tweeter Home Entertainment Group, Inc. (NASDAQ:TWTR) today from $5 to$3 while also trimming his earnings forecasts for the fiscal fourth quarter ended September 30 and for the 2007 and 2008 fiscal years. But why? Because -- shoppers are apparently skipping Tweeter for the two larger national chains for home, car, and personal electronics.

Best Buy and Circuit City both seem to be squeezing Tweeter on the sale of flat-panel television sets, like LCD TVs and Plasma TVs. Best Buy's rollout of specialized concept stores are also narrowing the differentiation between itself -- a mass merchandiser -- and specialty electronics firms like Tweeter.