Issues Facing Best Buy, CE Biz
By Steve Smith -- TWICE, 7/3/2006
SOUTHAMPTON, BERMUDA — Brad Anderson, vice-chairman/CEO of Best Buy, sat down with TWICE during the Consumer Electronics Association (CEA) CEO Summit after his one-on-one discussion with CEA's Gary Shapiro to discuss some other issues facing his chain and the industry. Here are some of his comments:
How are higher energy costs and higher interest rates affecting CE sales?
“They are having an effect, but because the industry's product offerings are so strong sales are still up. Xbox and the game category, flat-panel TVs and the like are in high demand. Our comp-store sales will be up for the balance of the year. But if $3 gas and higher interest rates weren't a factor, our comp sales would be growing even higher.”
What is your view on now having to compete against some of your own suppliers?
“I respect suppliers who want to do the best for their products. We represent plenty of different products so we try to provide a balanced presentation [for all]. Some suppliers want one story to be told. [This trend will] push everyone to be better competitors and improve their operations.”
Wal-Mart is making an attempt to go upscale in many categories, especially in consumer electronics. Is it a concern?
“One of the great untold stories about the economy in recent years is that in North America consumers are richer now than in any time in the past. Wal-Mart recognizes this. It has to dedicate some space to the higher-end lifestyle to serve those consumers.”
Are you making any changes to the consumer centricity model?
“Yes, there are three new groups that we are looking at. One is the middle-aged married males who are not PC oriented, but who use digital products. We actually identified this group through this guy's wife, who is about the same age and has a similar relationship with these products. Then there is the young, single female with no children who has different product needs. Names of these demographic groups and more details on these types of consumers will be detailed by us soon.”
