Wal-Mart’s sales are closely watched by Wall Street and considered a bellwether for the retail industry and the health of the overall economy. Now, the International Securities Exchange and Revere Data are trying to bring Wal-Mart’s suppliers to the forefront of investors’ minds.
Best Buy on Tuesday reported weaker than expected third-quarter profit, as competitors slashed prices on flat-panel televisions and its profit margins got squeezed. In an telephone interview, Best Buy CEO Brad Anderson discusses what happened in the quarter. Below is an edited transcript of the interview:
Reuters: It seemed like here was a lot of price competition in the 40-42 inch size (flat-panel television). Can you talk a little bit more about the larger size TVs, and is there an opportunity there for you to protect margins in those larger televisions?
Anderson: Customers are buying larger and larger screen sizes, but prices have come down about 30 percent on plasma TVs for instance, so we’re expecting the kind of pricing and margin pressure. The biggest thing we had happen in the last quarter is that the Thanksgiving weekend was more promotional than we expected…well actually …not so much more than we expected, but what people bought were at even lower margins than what we had anticipated. But overall it’s a very competitive business. It’s going to continue to get more competitive as a higher and higher percentage of the population is buying flat panel and larger screen size.
Reuters: Best Buy is focusing a lot on service with its Magnolia home theater installers, the Geek Squad. Does it look like it has come to the point where maybe customers don’t want services? They just want a good price on a TV and they’re willing to load it in a car and get it home and set it up on their own?
Anderson: No, our install business was up triple digits, so we had huge demand for install. Geek Squad was up very high double digits — so both are growing very rapidly.
After all the fanfare that accompanied the post-Thanksgiving holiday sales kick off, the retail industry has now settled into another annual tradition, the waiting game.
In this game of chicken, consumers wait to see how much retailers discount goods to get them in the stores while retailers hope consumers are spurred to action by concerns that the item they want may be sold out before they come to buy it.
“Because Christmas falls on a Monday this year, shoppers may be postponing purchases for a final-weekend spree,” Bain & Co. consultants wrote in their latest holiday spending newsletter.
Morgan Stanley analysts said in a report on Monday that its holiday shopping survey, which was conducted in late November, predicts a stronger holiday season than November sales indicated.
But industry consultant Britt Beemer on Sunday cut his expectations for same store sales to a 2.7 percent increase this holiday season from a 3.1 percent increase. The move marked only the fourth time in 20 years that Beemer, chairman and founder of America’s Research Group, has changed his forecast during the holiday season.
In an exclusive survey for Reuters, America’s Research Group also found that almost 40 percent of people said if they do not see 50 percent off promotions this season they will buy fewer gifts, buy less expensive ones, or buy gift cards instead.
What do you think? Are you waiting for big discounts before you shop? And how big do the discounts have to be?
Planning on stringing up zillions of flashing lights on your house to outshine your neighbor this year? Well Commonwealth Edison has a step-by-step guide to help you figure out how much that friendly competition will cost you:
Tips for calculating added energy costs:
1. Determine how many bulbs are on your strands of decorative indoor and outdoor lights. For example: 1,000 total bulbs.
2. Check the wattage per bulb – one watt per bulb is common. For example: 1 watt.
3. Multiply watts per bulb by number of bulbs. For example: 1 x 1,000 = 1,000
4. Convert to kilowatts (kW) – 1,000 watts equals 1 kilowatt. For example: 1 kW
5. Estimate the number of hours in a month the lights are on. For example: 5 hours per day x 30 days = 150 hours
6. Multiply the total kilowatts by the total number of hours the lights will be on to get the total kilowatt-hours (kWh). For example: 1 kW x 150 hours = 150 kWh
7. Multiply the total kilowatt-hours by the total cost of electricity.
And voila — there’s your bill. For typical ComEd customers, the total cost of energy supply, transmission and distribution of their electricity will be 8.6 cents per kilowatt-hour through the end of the year. For example, 150 kWh x .086 = $12.90.
So, will you still be putting up as many lights are you planned….or maybe adding a few more?
Looks like you can’t go wrong with electronics this holiday. The top 10 products searched for on Yahoo Shopping on Cyber Monday were all tech items – mainly video game related:
1. Nintendo Wii
2. Playstation 3
4. xBox 360
5. Sony PSP
7. Nintendo ds
8. iPod Nano
9. digital camera
10. digital picture frame
And now that cameras have gone digital, so too are picture frames. During the week 11/19-11/25, searches on Yahoo! Shopping for digital picture frames increased 239 percent week over week.