Although retailer Circuit City Stores, Inc. (OTC: CCTYQ) just a few weeks ago filed motions for Chapter 11 bankruptcy protection, you'd think all was well at the retailer. Not so -- the consumer electronics giant's shares closed yesterday at just over $0.21 and it's a ghost town scenario at many stores. After all, would you shop for holiday goods at a retailer "going out of business" in its current form? That's what Chapter 11 says to many consumers, anyway. Perception is reality.After having visited a few local Circuit City locations yesterday, they were indeed ghost towns. There was nobody (nada, zilch) in one of the locations I visited, and only one other person in the other location. And get this: comparing several general products in several categories, I saw very few sale prices that could compete with the competition -- namely, Best Buy, Inc. (NYSE: BBY). In categories like computers and MP3 players, Circuit City's pricing was dead in the water. At least its employees were, for the time being, getting paid to stand around doing nothing.
The struggling retailer has a decent wealth of information at its website including an open letter to Circuit City shoppers (PDF File) about the bankruptcy. None of that will cool any heels, though. If Circuit City wants to do any business this holiday season, it has to act like the competition, and that means instant rebates (not mail-in ones) and aggressive price discounts on hot product categories. How about something like "Free MP3 player with purchase!" or something similar? Fly that message on the flagpole and customers will respond. Don't, and you might as well shut the doors until next year.











Reader Comments (Page 1 of 1)
11-25-2008 @ 11:52AM
peterholthoffman said...
The two Circuit City stores here in Greenville SC are doing a very brisk trade. Their pricing is quite aggressive, the selection is better than the local Best Buy, and the sales people seem nicer and better informed.
Perhaps there are regional differences that affect people's perceptions of how well Circuity City is doing?
I intend to buy my electronics from Circuit City this Xmas as the last thing I want is for Best Buy to become a monopoly!
11-25-2008 @ 2:40PM
Mike O said...
The store I stopped by in metro-Atlanta had some modest foot traffic. Even with the "big sale" going on, prices were barely better than the competition. I walked out without buying anything... just like I have done 90% of the time I set foot in CC stores.
11-25-2008 @ 4:04PM
Iridium said...
The "Going Out of Business Sale" is a complete joke. Best Buy and Walmart were actually selling the same products cheaper than the store closing sale.
They had a 42" Samsung TV on "Clearance" that was $150 off the MSRP, $1650. I said I would give them $1300 for it and they passed. I told them Best Buy had it for $1500 and I want a better deal or I would just go over there. They still passed.
Circuit City always had a terrible selection and ugly stores. Anyone that thinks they are still going to be around in the coming months needs to take a better look.
11-25-2008 @ 7:28PM
Tony said...
It’s funny; I have read a lot of stories concerning Circuit City in the past month. It seems like Journalist are just going into their local Circuit City and by that experience judge the entire national chain. I have just brought products at Circuit City with Instant rebates not mail in rebates. So why are you leading people to believe that only Best Buy has the best deals? One of the products was an iPod Nano that was $10.00 less at Circuit City, is that dead in the water? Circuit City will match the price at best Buy and if you already brought the product give you 10% of the difference. Best Buy does not do that. So even if Best Buy has better prices all you have to do is walk into a Circuit City and tell them. Why are you journalists trying to dig this company’s grave? So if they do go out of business because of your false stories and reporting you will then write about how consumers need more choices on where to buy Consumer electronics.
11-26-2008 @ 11:14AM
j said...
This is one biased article
It is very obvious that CC is really hurting - hence the BK and store closings
I just find it laughable that this blogger says they dont price match?
CC just had a national commercial saying not only will they price match TV's, but they will price match with online sellers!
Kicking an American company while it is down is just plain stupid - think of the workers before you get ahead of yourself people
This biased article is most likely someone abusing their power to post web bias against a company they just dont like
Never mind the fact that holiday sales have not even been reported and also, I read that CC could be in better shape to weather next year than BB because CC has made the necessary cuts to employee and stock overhead
But factors like these never get mentioned in bias blogs such as this one
Truly Disappointing
11-26-2008 @ 10:02PM
Robert said...
Don't be so quick to defend this company. I was a hardworking associate who was laid off after 10 yrs. with a sorry severance,no helath insur. 3 days later w/3 kids,and a sorry promise to rehire me for $4 less per hr. I have sympathy for the workers,but not anyone who in corporate HQ,mainly that CEO who skated off with 1.8 mil. while I got $260 a week in unemployment. I hope they close,they ahve nothing but high school kids who don't care about the customers,or selling the services the stores offer. They have no incentive to work hard either when you'll cap out at a measly 11.99 per hr. no matter how long they are employed there. Look where hear work and dedication got me.
11-28-2008 @ 1:05PM
Josh said...
Wow, truely biased article.
Generally prices at CC and Bestbuy are exactly the same (mainly because they try to match each other constantly) and if not CC will match on the spot that day for weekly adds going and will actually go beyond that giving you 10% of the difference also. About the store being a ghost town, extremely not true i am constantly helping customers. Since the beginning of the season for christmas i have not had time to do anything but while i have been on the clock. Walmart should not even be brought into the equation when it comes to electronics compared to BB and CC because if anyone took the time to look into the products that walmart sells to see the difference, they would learn that Walmart gets products specifically made for their shelves to sell at cheaper prices that generally may look the same but truely is not as good on the inside when it comes to performance. Also for people to be saying their angry there's no "going out of business sales" did you ever stop to think the Company isn't "going out of business" maybe that could be a reason you wouldn't get a deal and prices are still comparable to other places. The media is absolutely tearing into CC throughout all of this which i find funny, because if CC does close who do customers have to chose from for NEWEST, QUALITY technologies and services. BB thats it, people can say walmart and others but truth is technology wise no other stores can compete with BB and CC. It will be funny to see how many people are complaining if they close that there is not enough market and that they hate the high prices.
11-28-2008 @ 7:03PM
Wes said...
Chapter 11 doesn't mean the end of the business entity. It just prevents its creditors from going into its pockets to retrieve the monies owed to them at will or by legal force. It's an act of protecting ones assets from the eager grasp of creditors who just want the buck they're owed. Stock prices reflect the view of what people who buy or have bought the stock think of the value of said stock or the entity that is doing business.
CC and BB are so comparable that stores are next door to each other in Manhattan, and the prices and selections differ depending on the particular items in question. BB has high end HT components, for example, while CC keeps to the majority of mid to low end variety(mostly mid). Prices are very close to each others and rarely higher or lower than each other in the mid range that are comparable. Yet, that might not give the overall chain a shot when it's competition just advertises better and more aggressively.
BB's image is better at the moment, and that is what hurts the competition most. Image will win out over the products sold every time.
11-29-2008 @ 12:50AM
Rumors killed CC said...
Robert sorry to hear about you losing your job. But I dont think that is really a reason to hope that a company goes under with all of its employees out of jobs and other kids with parents who have no paycheck.....and you say you feel for them???? Wow seems like your confused. CC will match BB price if its a every day price or sale (longer then one or two days). Like any other company. I worked for both. Not in high school ethier and friends that work for both companies are in their mid twenties... so this high school crap is just ridiculous. Have you been in to best buy? They have just as young employees...paid less then CC employees. So ........ Most of all besides image, its the news and these uneducated journalist/ or anaylsts who go off at the mouth like their stating facts. They rarely are. But the public is to lazy to actually look past that anaylst and read the truth. I see that some people here have and that is awesome. It is never good for a big company to go down. It hurts more then just its employees. If CC goes down Robert....that means people like you were at one time who are looking for a job just got that much more competition. Meaning its harder to find a job, and takes longer. Probably not a good thing if you have a family. Not trying to rip on you or anyone in your position. Its just annoying to hear you hope for a company's failure because of your incident and then to continue to hold them fully responsible for everything. Its seems that every employee who is fired is under the impression that it is all that companies fault. Thats how they always tell the story to get people to hate that company because of their own hate for it. Just people following other people thats why its so easy to get elected to office now a days. Just say you ll bring change and guess what everyone who s going through a rough time jumps on that wagon. Whether it will happen or wont.
12-01-2008 @ 4:17PM
umoo.com said...
Circuit city has to be more aggressive with its approach to lure customers. Best buy offers far more inexpensive prices compared to circuit city. On the stock front, I can only wish that I had shorted circuit city a month or two ago. It would have been a goldmine. :)
12-14-2008 @ 12:55PM
joe said...
North Atlanta - CC has horrible prices. Higher than ALL the competition during "Store Closing" sale. Pathetic.