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Best Buy, Walmart Took Circuit Share: NPD

Buy and Walmart were the biggest
beneficiaries of Circuit City’s demise,
according to a new report from market
research firm The NPD Group.

One year after the chain’s dissolution,
Best Buy and Walmart are sharing most
of the spoils, having captured two-thirds
of Circuit City’s dollar share from March
2009 through December 2009.

The NPD report, “New Look at Retail:
Post Circuit City,” reveals that Best Buy
extended its U.S. retail lead in some of
the CE industry’s most important product
segments. The chain’s dollar share
in fl at-panel TVs increased 5.2 percentage
points during the 10-month period
as its position as the only national electronics
retail chain allowed it to make
especially strong gains in the premium
$1,000-plus segment.

Walmart similarly made TV inroads
as a result of Circuit City’s closing, with
flat-panel representing the discounter’s
best-performing category in overall
share gains among the top CE sectors
with growth of 3.2 percentage points,
NPD said.

PCs were another bright spot for
both retailers. Best Buy firmly established
itself as the dominant third-party
seller of computers in the U.S., with
much of those gains coming through
its Web site, while Walmart saw its
year-over-year share growth increase
faster in notebooks than any other
computer category.

Digital cameras were another strong
growth area for Best Buy, with dollar
share gains of 5.5 percentage points,
equaling those of notebook PCs.
Walmart, meanwhile, saw its dollar share
climb above its previous levels during the
crucial fourth quarter of 2009.

“As its nearest competitor, both in
store locations and in consumer perception,
Best Buy was certain to be
the big benefi ciary from Circuit City’s
closure,” said Stephen Baker, industry
analysis VP at NPD. “However,
with the closures coming at the same
time as an economic recession, tumbling
[average selling prices] in both
PCs and TVs, and Walmart’s renewed
focus on consumer technology as a
growth opportunity, it is not surprising
that Walmart also managed to grow its
share during this period.”

While Walmart has traditionally seen
its highest market share in the South,
Best Buy was also able to make signifi –
cant gains in that region as the retail landscape
changed, NPD said. Walmart increased
its dollar share by 2 percentage
points in the South, while Best Buy bested
that with a 4 percentage point gain.

“We expect that in 2010 all retail
channels will focus on their share
growth opportunity in technology as
new products, a better economy and
renewed consumer interest deliver an
exciting sales outlook for the remainder
of the year,” stated Baker.

The NPD report is based on data collected
from the firm’s Consumer Tracking
Service, an online panel comprised of
more than 1.8 million registered adults.