Best Buy’s News Not Quite as Grim as It Could Be: November Sales Flat
by Peter Kafka
Posted on December 16, 2008 at 5:49 AM PT
Best Buy is cutting expenses, trying to lower headcount through buyouts and/or firings, and has slapped this grim headline on its third-quarter earnings release: “Best Buy Continues To Prepare For Difficult Economic Environment, Plans Significant Spending Reductions.”
Still unclear about the company’s prospects? CEO Brad Anderson tries to spell it out: “We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace.”
But! There is at least one glimmer of not-terrible news buried in the retail giant’s report this morning: Same-store sales for November–that is, year-to-year comparisons for stores that have been open for at least 14 months–were “essentially flat.”
That’s once you factor out a weird calendar anomaly between this year and last year. If you don’t account for that, same-store sales were down 8.7 percent. But whatever. Flat is the new up, and we need good news, so we’re taking what we can. The company says that while store traffic was down, people were buying bigger ticket items like notebook computers and mobile phones.
Why are you reading about a retail giant’s performance in a media column? Because the performance of Best Buy (BBY) and other retailers during November and December is going to have a big impact on ad budgets for 2009.
Alas, not all of the media news coming out of Best Buy is as good (or at least not bad). The company reports “double-digit declines” in movie and music sales (thanks for nothing, Guns ‘N Roses fans) and single-digit declines in videogames.
Comments
I wonder as well if Best Buy has had more loss leaders this November. So sales could be up but profits down.
It’s always sad to hear of layoffs. I have to admit that service tends to vary a bit. When I want to browse, I have four or five associates wanting to help me. When I want to buy, I can’t find anyone to help. I’ve even called a store (from inside the store on my cell phone) asking for assistance.
Posted by Ken Okel at December 16th, 2008 at 4:13 pm