Top US electronics chain forecasts dire times � sales declining
Best Buy, the number one US retailer claims that falling consumer spending, driven by the recent turmoil in the financial markets and the general economic malaise has resulted in lower-than-expected revenue.
In a release issued today, the company says that the uncertainty regarding future consumer spending has limited its ability to project revenue for the critical holiday shopping season and the balance of the fiscal year.
“Given both the change in economic environment and the significance of the holiday shopping season to the company’s annual earnings, Best Buy is lowering its guidance for the fiscal year and widening its range for potential revenue and earnings,” the company said in a statement.
“Since mid-September, rapid, seismic changes in consumer behaviour have created the most difficult climate we’ve ever seen. Best Buy simply can’t adjust fast enough to maintain our earnings momentum for this year,” said Brad Anderson, vice chairman and chief executive officer of Best Buy.
Total comparable store sales declined by approximately 7.6 percent for fiscal October, following a modest comparable store sales decline for fiscal September.
Brian Dunn, president and chief operating officer, said, “In 42 years of retailing, we’ve never seen such difficult times for the consumer. People are making dramatic changes in how much they spend, and we’re not immune from those forces.”
In reaction to changes in the marketplace, the company said it is proactively working with its vendors to adjust both its inventory levels and its near-term working capital position –translated will mean fewer orders in 2009.
On Monday, Circuit City Stores, the number two US consumer electronics retailer, filed for bankruptcy, becoming the largest retailer to file for Chapter 11 in the US since Kmart in 2002.