Richfield-based Best Buy had a pretty bad holiday shopping season. It was expected. Sames-store sales slipped 6.5 percent in December.
Same-store sales, or sales at stores open at least 14 months, are a key indicator of retailer performance because they measure growth at existing stores, rather than newly opened or closed ones.
Best Buy said its U.S. stores had strong sales in flat-panel TVs and notebook computers, as well as cell phones.
But shoppers bought fewer digital cameras, MP3 players, movies, video gaming systems, and major household appliances, as well as less entertainment software and music.
Retail consultant Howard Davidowitz said the outlook for Best Buy is not good, because it's focused on selling products that many people will do without in hard economic times.
"Best Buy is discretionary. That means they're going to be under tremendous margin pressure. That means they will be in a life-or-death battle with Wal-Mart," said Davidowitz. "They can't match Wal-Mart on price. They're winning on service. But the consumer is into price right now. That is the priority. So, Best Buy is going to have problems going forward, as well."
Best Buy also announced it plans to take a $60 million charge to cover the cost of providing buyouts to some 500 employees at its corporate headquarters.