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Best Buy Q1 Profits Fall 12% -- Do you still shop at BBY?


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#1 of 42 OFFLINE  

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Posted June 14 2011 - 06:12 PM

The interesting part is the steep decline in music and movies at 13.1%. Is that because consumers are purchasing content digitally from the likes of Apple and Amazon or is it because consumers are consuming content from free or rental services like Hulu and Netflix or is it because BBY isn't competitive on pricing for that category? Personally, I still purchase at BBY and amazingly purchase enough each year to be a Silver Reward Member, which has nice benefits like free shipping. I do get alot of Blu-Ray titles from BBY when they are cheaper than Amazon, but still primarily purchase from Amazon as I have the Prime membership. I also purchase used Blu-Ray's on Amazon, something I can't do from Best Buy. Do I buy hardware from BBY, only when I can't get a better deal other places, like all my iOS stuff I get at BBY because it can keep me in their reward program. If they didn't have the reward program, I don't know how sticky I would be to purchasing their. I'm certianly not happy that I can't get the iPad 2 at BBY! From Twice Magazine << By Alan Wolf -- TWICE, 6/14/2011 Minneapolis - Increased promotions, higher transportation costs and disrupted digital imaging shipments contributed to soft sales and falling profits during Best Buy's first fiscal quarter. Net earnings declined 12.3 percent to $136 million for the three months, ended May 28, on net revenue of $10.9 billion, a 1.4 percent gain. Comp-store sales slipped 1.7 percent company-wide. In the U.S., revenue was essentially flat at $7.9 billion while comp-store sales fell 2.4 percent. Operating income declined 21 percent to $234 million, compared with a 10 percent decline company-wide to $282 million. U.S. gross profit declined 3 percent to $2 billion, compared with a 6 percent increase overseas to $798 million, as the domestic gross profit rate declined by 60 basis points. Best Buy attributed the drop to increased promotions to drive improved revenue; industry-wide supply interruptions of digital imaging products due to the earthquake and tsunami in Japan; higher transportation costs; and a large, annual vendor rebate in the first quarter of 2010 that impacted year-over-year comparisons. Partially offsetting the declines was a 28 percent spike in cellphone sales, a 12 percent increase in online revenue, and a 20 percent increase in subscriptions and other "connection" sales in the U.S. The company also pointed to strength in mobile computing and tablets, as well as e-readers, appliances and warranty, and repair and installation services, but reported weakness in TV, digital imaging and physical media. Broken out by category, domestic comp-store sales for the newly combined computing and mobile phone categories rose 4.7 percent, to 40 percent of the mix; majap comp sales rose 2.9 percent, to 6 percent of the mix; CE comps, including TV and digital imaging, declined 6.8 percent, to 35 percent of the mix; comps for entertainment, including music and movies, fell 13.1 percent, to 12 percent of the mix; and services comps remained flat at 6 percent of the mix. >> .

#2 of 42 OFFLINE   Craig S

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Posted June 14 2011 - 09:12 PM

There are two factors that have contributed to me shopping much less at BB than I used to: (1) The opening of a Fry's nearby, and (2) getting and using my Amazon Prime membership.


If I just want to browse physical media, Fry's just has a bigger selection. I wonder how much of the drop in BB's music & movies sales can be attributed to the recent reduction in floor space given to same in most BB locations??


Most of my buying these days is done on Amazon. Even when BB has a better price and Amazon doesn't match, it usually ends up cheaper for me at Amazon because they don't charge sales tax. Add to that free 2-day shipping. And pre-ordered BDs, DVDs, and CDs almost always arrive on the day of release, so even that "gotta have it NOW" impulse can be satisfied.


The only thing that takes me to BB these days are store exclusives (like Midnight Cowboy & Pelham for $10) and crazy promotions like the recent X-Men deal ($7.99 for a copy of Wolverine on Blu with $12 of movie cash attached).


I believe that Amazon's sales tax exemption will eventually be legislated away. The states are simply losing too much revenue to out-of-state online retailers. At that point I expect my Amazon / B&M shopping ratio will re-balance.


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* It's not what a movie is about, it's how it is about it.

* No good movie is too long, and no bad movie is short enough.

* No good movie is depressing, all bad movies are depressing.


#3 of 42 OFFLINE   Scott Merryfield

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Posted June 14 2011 - 11:58 PM

I've avoided shopping at Best Buy for years. I find their prices too high, their staff unhelpful, and online shopping is much more convenient. My last two trips to Best Buy were to use Best Buy Gift Cards to purchase Amazon Gift Cards.



#4 of 42 OFFLINE   cineMANIAC

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Posted June 15 2011 - 12:52 AM

I 'd like to vote in this poll but there's no category for "I only bother going to BB to pick up a heavily-discounted DVD or Blu-ray". No, I don't have a real need for Best Buy.


 

 


#5 of 42 ONLINE   Jason Charlton

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Posted June 15 2011 - 01:11 AM

Like Luis - I didn't vote in the poll because there wasn't an answer option along the likes of "Only in the rarest of instances".  I can count on two fingers Posted Image the number of titles I've purchased at a Best Buy this past year.  Both purchases were facilitated by extra coupons that brought the prices down to a point where it was actually a better deal than Amazon.


Granted, I don't purchase titles at all like I used to - I'm being a bit more selective and budget-conscious overall.  Netfllix helps alleviate my desire to run out and make an "impulse" purchase, and I have several RedBox options nearby, though I have yet to give that a try.




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#6 of 42 OFFLINE   Colin Davidson

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Posted June 15 2011 - 01:23 AM

My purchasing has been reduced due to economic factors (wife recently unemployed) more than anything else. I purchase most of my BD's from BB with occasional purchases from Amazon when the pricing is just to good to pass up, such as the recent 7 disc POTC. Since I live in Washington State the Amazon "no sales tax" situation does not come into play so no savings there. I also, it seems, have had bad luck with "floaters" and damaged discs that make exchanges even more of a hassle when purchased online.



#7 of 42 OFFLINE   robbbb1138

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Posted June 15 2011 - 01:41 AM

Unless it's something that I forgot to pre-order and have to have on the release date, Amazon Prime has made Best Buy obsolete for me.  The small exception is for some Disney movies where they might have a better deal and Amazon wouldn't take the $10 coupon, but even those often ending up sending me to Target or someplace for a slightly better price.



#8 of 42 OFFLINE   TravisR

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Posted June 15 2011 - 02:59 AM

I go to Best Buy when they have the best price but in the last year or so, that only happens infrequently. BB very rarely stocks catalog titles at good prices and they don't even really compete with Target's prices on current movies or TV shows either.

#9 of 42 OFFLINE   rayman1701

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Posted June 15 2011 - 04:31 AM

I still shop there about the same as always.  I've been a Premire Silver member since it started, but I'm a little disappointed that they changed the Napster benefit and am not sure if I will now go out of my way to stay a Premire Silver member next year.  Having said that, I have this need to get my new music day of release and so get stuff almost every week there, although since they have gutted their music section that is getting harder and harder to do.  Picked up the Foo Fighters Blu-ray and Black Country Communion cd yesterday. And it was a different store than what I normally go to, since I was out for a Dr.s appt. and that store had a huge selection of music compared to the 2 that are closest to where I live, so that was nice, but the selection has just become pathetic. It makes me both sad and disappointed that people have quit buying music in a way to keep stores stocking it, but then again how can people buy it if it's not in a store.

However, I've never been a been a big Blu-ray buyer at Best Buy simply because I can get them for normally $5-7 cheaper with "everyday" pricing and a lot more with special sales at Amazon, so that's where I buy my movies for the most part.  Now if it's an exclusive or something with added bonus stuff that I want, I'll decide that on a case by case basis.  For electronics, it depends, they do stock the TV I plan to upgrade to and have good financing on that, as well as a good iPod replacement warranty.  But they have such sporadic stocking of some types of electornics, and then it's usually only stripped down entry level stuff, and hardly any stock of mid-fi or up.  And it is near impossible to do meaningful comparisons at the store, at least for me, especially when I end up knowing more about their products than the sales staff that's there to help and answer questions. Also half the time the demo rooms are not working right, or like yesterday the one 3-D display was broken.  So to sum it up, I haven't changed my habits much, but I have always checked several stores (remember Circuit City, I would always compare prices in the Sunday circulars), and found the best deals.


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#10 of 42 OFFLINE   GMpasqua

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Posted June 15 2011 - 04:33 AM

Best Buy used to be a great place to shop (Ten years ago) but since they killed the competition they have also eliminated many of the reasons why the competition was killed.


Best Buy would have great prices and many catalog titles. But lately they are over priced and there selection is minimal. I hardly ever shop there any more (once in a blue moon)

Even for electronics I go elsewhere (better quality). Best Buy has become the Walmart of electronics.



and these door greater??? - I hate having my concentration broken when I walk into a store only to have some greeter interupt me with a non-sincere helllo. They could be put to better use ringing up sales at the cash register. (Yes, I also know they are watching for theif)



#11 of 42 OFFLINE   ScottHM

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Posted June 15 2011 - 07:53 AM

I wander through my local Best Buy once in a while, but I rarely buy Blu-rays or DVDs there because:


1)  I mostly buy catalog titles, and the small Best Buy near me has a very poor selection

2)  When I do see a movie of interest in BB it is usually 50%-75% more expensive than the same thing at Amazon.


I will occasionally buy a movie there if it's a new release and priced similar to Amazon's price.


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#12 of 42 OFFLINE   ahollis

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Posted June 15 2011 - 08:27 AM

I rarely purchase a Blu-ray or DVD from Best Buy these days.  The last purchases were Taking of the Pelham 123 (1974) and Midnight Cowboy Blu-ray's because they were exclusives.  Other than that, I cannot remember the last time I bought something from there.  I would purchase more if I could be certain that some of the older films would be available there, but a few years ago I got tired of going there on Tuesday and finding out they did not stock it.  I mostly use Amazon and order a week before the release date and usually get it on a Thursday.  I can certainly understand why their profits are down.  Most everyone has replaced their TV with an HD one and have no interest in buying 3D equipment so soon.  You can only be certain that new films will be stocked and it is compete hit and miss for older films so no need to go.

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#13 of 42 OFFLINE   Bobofbone

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Posted June 15 2011 - 10:17 AM

My last pourchase at Best Buy was before Chrismas, when I bought a Sony Blue Ray player for my wife, mainly to access the internet features and Netflix. At the time, the salesman also aggressively pushed Monster Cables to connect to my old analog set I was going to run it through temporarily. Whewn we opened the box Christmas day, I found "internet ready" meant I had to go back and purchase a converter box for another $80-the blue ray player was an older model. I went to Walmart the next day, found the a current model Sony Blue ray player at t lower price that didn't require a converter box and received directly from my home WiFi. I took the original blue ray back to best buy for a refund. I did make another purchase-they had some boxes of Hot Tamalees that turned out to be pretty fresh.


With a knowledgable sales staff, almost new products and prices like this, they should expect the kind of performance they are seeing.



#14 of 42 OFFLINE   Carlo Medina

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Posted June 15 2011 - 11:07 AM

I've actually noticed that Best Buy has gotten better about their release date pricing in the few months or so (probably because their sales are flagging) so I've shopped there more than I have in the most recent years, but not as much as I shopped say 5-6 years ago when their release date price on DVDs were more competitive (they were rarely competitive for BDs until recently). I will shop there when their price is competitive and when I need instant gratification. Otherwise I go to Amazon who often have a significantly better price and my Prime membership gets the items to me quickly.


For electronics I hardly buy from there because I'm usually buying the mid-end gear (not mass market) and I get that through the 'net.


About the only thing I'll buy from there is rare, $1500+ purchases because I can get no interest financing for 2-3 years and it's worth the extra $100 or so to get the financing. But this type of purchase happens once every 2-3 years.


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#15 of 42 OFFLINE   ManW_TheUncool

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Posted June 15 2011 - 12:07 PM

I'm like most here and only drop by BB when they occasionally have great prices for certain BDs I want -- and usually, I just order online and do the in-store pickup thing unless it involves coupons.  I rarely ever go to BB otherwise.


Their prices on most everything else are not competitive enough (especially considering the lack of real quality service they provide) although I do consider shopping there once a blue moon if/when I'm looking for a big new TV -- and I did buy a previous RPTV from them some years ago.  I guess I might also consider buying a mobile device like a tablet or maybe a game console (if I ever buy another one) from them since pricing on such tend to be more uniform across all vendors.


For A/V gear (other than the TV), I'm kinda like Carlo and am not generally interested in what they offer -- not that I regularly shop for A/V gear anyway (and would usually consider buying quality used gear to fit my budget better).


Of course, there still does seem to be a lot of shopping options here in the NYC area (though no Fry's), so...


Originally Posted by Carlo Medina 
About the only thing I'll buy from there is rare, $1500+ purchases because I can get no interest financing for 2-3 years and it's worth the extra $100 or so to get the financing. But this type of purchase happens once every 2-3 years.


Yeah, I did just that when I bought an RPTV from them some years ago -- and might've gone w/ them again for my current one, if Crutchfield hadn't done their Samsung LED DLP clearance sale at the time...


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#16 of 42 OFFLINE   David_B_K

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Posted June 15 2011 - 03:42 PM

I voted "No, but I used to". I once bought a lot of DVDs from BB, and bought my first Blu-ray player there. Now I buy most media (Blu-rays, CDs, books) via Amazon Prime. And there is a Fry's about 5 minutes away.

#17 of 42 OFFLINE   cineMANIAC

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Posted June 16 2011 - 05:52 AM

Best Buy does have good prices on new Blu/DVD releases on street date so I'll usually wait to purchase a new release at BB as opposed to ordering it on Amazon. I have Amazon Prime but I prefer to pick up certain titles as they're released - I don't like waiting. A good way to get an idea what BB will charge for a new release Blu/DVD is by looking it up on Amazon. BB will almost always charge the same price as Amazon (at least during the week it streets). I could pre-order The Adjustment Bureau on Amazon for $22.99 but BB will likely charge that price so I'll just go to BB on Tuesday.


 

 


#18 of 42 OFFLINE   Todd H

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Posted June 16 2011 - 06:03 AM

I haven't shopped there since I got my Amazon Prime account.

#19 of 42 OFFLINE   ThatDonGuy

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Posted June 16 2011 - 07:07 AM

I shop Best Buy (a) for hardware (I just got a Sony N100 player - and, despite the horror stories about BB personnel not knowing their stuff, the person who helped me knew exactly what I meant when I said, "You know what a Roku box is?  I want the Sony version" (i.e. the N100)), and (b) when I want a "first day" DVD release and don't feel like waiting the week it would take for Amazon's "Super Saver" delivery (I don't have Amazon Prime, in part because I do have a B&N membership, which has free 2-day shipping).



#20 of 42 OFFLINE   Charles Smith

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Posted June 16 2011 - 07:15 AM

I was a late comer to Best Buy, mainly because they didn't have a store around here for the longest time, but several years back I was enjoying a lot of browsing DVDs to my heart's content and catching up on catalog titles at decent prices.  All of that changed, of course, suddenly and drastically, and my activity on Amazon and Amazon Marketplace picked way the hell up at that point.  But BB (not to mention the then-nice Borders right up the street) very definitely enjoyed a Golden Age of catalog film inventory.


Now I'm thinking BB's hardware departments run kind of parallel to the DVD/BLU situation.  At least in the Magnolia Room.  It looks like there is WAY less carried there in general -- it's downright sparse in comparison to even a year ago.  As it happens, I made my most recent large purchases there in 2010 -- not because the price was the best but because there were two salespeople who could talk my language and were extraordinarily knowledgeable and helpful.  I bought my Pioneer Elite receiver, the Panasonic VT25, and some Energy surrounds at BB.  (Not to mention a laptop and other non-home-video items.)  I especially wanted to be able to cart the TV right back in if anything went wrong, and I was happy (at least until I read a couple of quotes here!) with their price and coverage on an extended service package on the TV.  That, plus the package deal on 3D, made the TV a great purchase.


Nowadays?  A quick in-and-out on Blu-ray new release days when the price is right, and for the Pelham, etc., exclusives -- after I have already done my homework here.