Monday, January 14, 2013

Best Buy Survives the Holidays

Best Buy did okay last month, with same-store sales basically equal to the year before, though this is not such good news in a year when many underperforming stores were closed. It’s a report that vindicates the chain’s new merchandising strategy which has seen it reduce its stock and carry only a few select brands in each category.

I happened to visit Best Buy over the weekend, and I worried a little about how much of the display was given over to televisions — more, in fact, than ever before. To be sure, if there is a season to be selling television displays in the United States, it is the second half of January, as people who will be hosting Super Bowl parties upgrade. But the store I visited seemed to have more than 100 different models of televisions on display, so that it will be fortunate to sell an average of one of each model in the two weekends remaining before the Super Bowl. Perhaps this is the right adaptation for right now, with manufacturers making more televisions than they can sell, but it surely isn’t a merchandising approach that can be carried forward beyond February 3.

And then what? If the best that Best Buy can do is tread water, it will probably be looking to close and shrink a few more stores this year. For a consumer electronics store, it is a long way from February to November.