Although sales continue to decline, Best Buy executives are sticking with the plan to turn the business around primarily through cost-cutting. The company has been successful in reducing expenses, but sales continue to lag.
In Best Buy's second quarter results report, CEO and President Hubert Joly said,
"Like other retailers and as reflected in this quarter's performance, we continued to see a shift in consumer behavior: consumers are increasingly researching and buying online. As a result, traffic to our brick and mortar stores continued to decline, yet our in-store conversion and online traffic continued to increase due to the execution of our Renew Blue strategy which is in direct alignment with this shift. Our Renew Blue strategy is designed to (1) grow our online business; (2) enhance our in-store customer experience; and (3) leverage our multi-channel capabilities; all to deliver to our customers great advice, service and convenience at competitive prices in the channel they want to be served.
"During the quarter, we continued to make progress against this strategy, including (1) increasing our Net Promoter Score across channels by 400 basis points year-over-year; (2) improving our in-store experience by rolling out over 800 new Samsung and Sony home theater, 18 Pacific Kitchen and Home and 7 Magnolia Design Center stores-within-a-store; and (3) leveraging our new ship-from-store and digital marketing capabilities to drive a 22% increase in Domestic comparable online sales."
CFO Sharon McCollam reinforced Joly's message: "Industrywide sales are continuing to decline in many of the consumer electronics categories in which we compete."
- Read Best Buy's entire second-quarter report. What are the key messages?
- What's your reaction to the executives' statements? Overly positive, blame-shifting, realistic, optimistic, or something else?