Best Buy saw its revenues slow to single figures over Christmas as changes in consumer spending finally began to take their toll on the world's largest consumer electronics retailer.
Sales rose by just four per cent globally during the crucial December period, with domestic revenues actually declining by one per cent. International revenues helped to push the firm's growth into positive figures, posting an increase of 29 per cent during the month.
The retailer's prolific US store opening programme during 2008 – 138 in total – helped to stave off what could have been a much worse month for the retailer, after it revealed like-for-like sales were down by 6.5 per cent on Christmas 2007. The retailer put the decline in like-for-like sales down to a 'comparable' decrease in store traffic.
Despite the decline in like-for-like sales, the retailer was confident that it had continued to increase its market share, especially after the collapse of CompUSA in early 2008 and the Chapter 11 filing made by fierce rival Circuit City.
A closer look at the figures revealed that almost all of the retailer's key market segments experienced a decline in sales, though some worse than others. Consumer electronics and entertainment software both declined heavily, 8.7 per cent and 12.2 per cent respectively – though not as much as appliances, which fell by 24.5 per cent reflecting a global decline for white goods, as Comet and DSGi, have experienced this side of the Atlantic.
Consumer electronics saw its sales continue to tumble, with the decline gathering pace from 2007's decline of 4.4 per cent. Televisions continued to see growth in the high single digits, but that was largely offset by declines in demand for digital cameras and MP3 players.
Entertainment sales also tumbled, despite having seen growth of 7.4 per cent in 2007. The retailer blamed the shift in purchases away from hardware towards software for the decline in revenues.
Only the retailer's home office segment saw an increase in sales, experiencing growth of 6.5 per cent, boosted mainly by the introduction of the retailers mobile phone operation and the continue growth of PCs and netbooks, though increases where in the low single digits.
Speaking about the results, vice chairman and chief executive officer Brad Anderson stated: "While the environment continues to be as challenges as we expected, consumers are being drawn to brands they trust, and they are responding to our customer-centric model.
"In this light, we believe the market share gains we've been making will be sustained," he added.