Best Buy Inc. (NYSE: BBY), the consumer electronics retailer whose shares have slumped more than 12% this year, confirmed Wall Street's growing fears about consumer spending and cut its earnings outlook.

The Richfield, MN company expects fiscal 2008 earnings of $3.05 to $3.10, down from previous guidance of $3.10 to $3.20. Analysts expected profit of $3.17. Comparable stores sales are expected to rise 2.5 to 3%, below the company's previous forecast of a 4% increase. Fourth quarter same-store sales are expect to "decline modestly" in the fiscal fourth quarter, reflecting broader economy.

"Our December revenue results were in line with our expectations. Soft domestic customer traffic in January, coupled with our near-term outlook, now indicate that our fourth-quarter revenue will fall short of our planned targets," Brad Anderson, vice chairman and chief executive officer of Best Buy, said in a press release.

The company plans to open 130 to 160 new stores during its 2009 fiscal year, increasing its total retail square footage by about 10% to 51 million square feet. In addition, it plans "to bring more than 12,000 new retail management, sales and services positions to communities in its markets." Last year, rival Circuit City Stores Inc. (NYSE: CC) came under fire for firing 3,400 workers who were "paid well above the market-based salary range for their role."

Look for both Best Buy and Circuit City to discount like demons to lure consumers back into their stores. Maybe I'll pick up the plasma screen I've been eying.

Freelance writer Jonathan Berr edits the blog Ketchup and Eggs.