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dpdoor (30.34)

Insiders Action BBY vs CC

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September 22, 2007 – Comments (2)

Best Buy is my favorite place to buy (next to the internet) but I just don’t see shopping carts of product any more, just little bags and no waiting. A newer store I went into had far more employees then customers, an employee said “people just don’t seem to be able to find us.” People I ask say Costco and Wall Mart are much cheaper on big Items, and Wall Mart is now the place to go for dvds, Game Works for games and now Radio Shack will be doing the big name games. Although Best Buy sells Apple I understand Apple  doesn’t do as well in the warehouse setting. Where I buy groceries they have a vending machine that sells Ipods. It seems unlikely Best Buy is selling as much per store as they did in their hay day.

 I like Best Buy but come on who wrote the financial report. Look at Circuit City, they have been the same old store for years, not as cool as Best Buy but they have hung in there.  With the equity in homes already spent over the last 4 years people just aren’t spending like they use to. Circuit City’s report reflects that. CC’s insiders only own 1.08% of their stocks and their report came out reflecting the new trend. BBY’s insiders own 16.92% (80mil shares) of their stock.  That is 80 million dollars for each dollar the share moves.

I’m not suggesting that they make more money from investors then they do selling product or that they would put off some of their expenses to show more profit, I’m just saying it’s curious ;)

2 Comments – Post Your Own

#1) On September 22, 2007 at 3:03 PM, TMFHelical (98.85) wrote:

Well,  here is my take on Best Buy.  I've never bought anything from them but have been in the stores a dozen times.  I've looked at them when I wanted to buy a TV, a camcorder, a DVD player, vacuum, etc.

They have a lot - but they are loud and annoying.  I'm 43, and the type of guy that might drop a grand on a plasma screen or buy a washer-dryer.  But...the stores are laid out to appeal to appeal to who?  People < 25 years old in my opinion.  Is that really who is spending money there.  It must be the audience, I don't think I've seen a singe salesperson > 30 when I've been there.  Is that what you find at Lowes or Sears (nope).

If you were bringing your mom in to buy a clothes dryer or a new TV - do you think she would want to visit Best Buy? Eventually this core young audience will have the funds available to buy more than just DVDs (do they buy those today - or just download?), and BBY may do well long term - but I can't get behind a store that aggravates me to shop there.

 Anyway - decent store, but they are missing a good chunk of the market IMO.  Of course the other side is no one else is selling these items to the younger crowd like Best Buy - so perhaps they have found their niche.

 ZZ

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#2) On September 23, 2007 at 12:39 AM, DerektheDude (98.89) wrote:

You guys make some great observations. I think Best Buy and Circuit City amounts to another Pepsi vs. Coca Cola; BBY, of course, playing the role of Coca Cola. HelicalZz is right about the target market, BBY is definitely going for the younger crowd. Unfortunately, I moved out of that crowd this year according to your age range. :-)

But I do agree. Best Buy's store here in Lincoln is bright, loud, and there's never a shortage of kids (from kids - early twenties) loafing around the CD aisles and playing games in electronics. I enjoy visiting CC more, as it isn't a sensory overload. They buy most their product in bulk, especially CDs, so it's usually cheaper than BBY. BBY is clearly the leader, but I would look at CC to slowly gain some market share. One thing BBY has going for it is it's advertising. Just off the top of my head, I can acually remember the last BBY commercial I saw: Parents of a college girl took their camper to campus because they're worried she isn't prepared, technologically. Geek Squad guy assures them that he hooked her up. Hungry college kid asks dad for a soy burger.

The last CC commercial I saw? Could tell ya.

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