Best Buy December CE Sales Fall 7.9%7 Jan, 2011 By: Erik Gruenwedel
In the midst of the consumer electronics industry’s annual hype fest in Las Vegas, reality hit back when Best Buy Co. Jan. 7 reported a near 8% drop in same-store consumer electronics sales during the month of December.
Total revenue dropped 1.6% to $8.4 billion from $8.5 billion a year ago.
The Minneapolis-based No. 1 CE retailer said soft sales of movies, music and video games (down 15.4%), and televisions (low double-digit decline) contributed to a 5% decline in same-store (open at least 14 months) revenue, compared to a 9.3% increase during the same period in 2009.
Best Buy is slowly transitioning entertainment retail toward digital distribution, specifically through its CinemaNow virtual storefront.
Sales at BestBuy.com increased 13% during the period, underscoring a banner e-commerce holiday season that set several revenue milestones.
Other bright spots included a double-digit revenue increase in Best Buy Mobile and appliances.
Analyst Michael Pachter with Wedbush Securities in Los Angeles said the decline in video game sales supported the premise that hardcore gamers frequented GameStop (which reported record revenue), while casual gamers sought better deals online.
“Online and big box retailers likely captured additional dollar spend from more casual gamers,” Pachter wrote in a note.