Best Buy, Inc. (NYSE: BBY) warned of a disastrous holiday retail season before it occurred, even with bankrupt competitor Circuit City Stores, Inc closing stores and having survival issues. Wal-Mart Stores, Inc. (NYSE: WMT) by far was Best Buy's worst nightmare over the holidays, gaining same-store sales growth and being about the only retailer that was growing while all the others were shrinking.With Best Buy set to report December earnings this Friday, many eyes will be on the retailer to see just how bad or good it performed over the holiday selling season. Stifel Nicolaus analyst David Schick believes that a 6.5% drop in same-store sales is on tap for the December quarter for Best Buy, which would be in line with the retailer's own doom and gloom predictions. However, Schick also thinks that there will be an uptick in December's numbers based on Best Buy's grasp of market share from the faltering Circuit City.
Schick notes that the rapidly falling prices in flat-screen televisions has hurt Best Buy, along with "the largest drop in durable goods spending since 1942." Best Buy still, though, has most of the market for consumer electronics outside from the mass discount retailer scene. There is generally not much national competition for the retailer outside the warehouse clubs that sell specific product categories of electronics, and of course Wal-Mart. Still, when consumers start spending money again, Best Buy will probably rise mightily from the ashes.
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Reader Comments (Page 1 of 1)
1-08-2009 @ 3:13PM
Concern said...
i was at walmart in portland over the holidays and their tv selection is poor - the vendors are clearly "limiting" what walmart gets - if they had 90% of what best buy has, best buy would get creamed. americans are paying too much for their TVs.
1-12-2009 @ 12:54PM
nck said...
As a BestBuy employee I would like to state that not only does bestbuy have better choices but we are also able to answer any questions a customer might have on a product ...I work in car electronics which also has a wide array of GPS ..and I take 50+ questions a day inregards to our products. If walmart could provide the customer service we do then they might have a chance at beating us....but as most walmart employees make 7 to 8 dollars an hour and get little to no training in operation or options of there products I think Bestbuy has little to fear .