Minneapolis — Best Buy’s recent share gains in TV should continue through the holidays and beyond, a new analysis suggests.
Best Buy reported TV comp gains in the second quarter, with CEO Hubert Joly citing the shift to larger screen sizes and the concomitant increase in average selling prices (ASPs).
But Janney Montgomery Scott retail analyst David Strasser believes additional factors will propel Best Buy’s video growth, including new display technologies, strict UPP enforcement, better in-store service, improved website functionality, a price-match guarantee, and last year’s addition of Vizio to the assortment.
The latter, he argues in a research note, offers brand identity and tier 1functionality at prices that are about 20 percent below premium nameplates like LG, Samsung, Sharp and Sony. It also provides a strategic response to Costco and Walmart, for whom Vizio comprises about 45 percent and 26 percent of LED TV SKUs, respectively, he observed.
“The presence of Vizio at Best Buy gives us confidence that the share gains will continue through holiday,” he wrote, “and [that] the share they gain is sustainable and should prove defensible as the company benefits from long-term positives of selling the brand name price leader in TVs.”