Best Buy throws in the towel. Is this the beginning of the end for big box electronics?

7 November 2011

Bitterwallet - Best Buy logo By now we've all heard the bell toll for Best Buy UK. After the flurry of launch hype (Bitterwallet included) and high hopes for a US chain breaking in and destroying the doldrums of UK big box retail (Bitterwallet included) we're left with nothing but 11 mega stores for Currys or Comet or a mini Ikea to move into.

The harsh part of the story seems to be that Best Buy did not fail because the UK incumbents were too smart, too strong, too price conscious. During the 2010/2011 period where they went head to head we've seen troubling revenue numbers at DSGi and Comet and no great spark of competitive innovation. It may be fair to say that Best Buy did not lose in the UK market because DSGi/Comet won but rather because they all lost and Best Buy was the one with the least to lose by jumping out.

Indeed, while we can surely imagine the suits at DSGi/Comet patting themselves on the back for holding off the US invader, the truth is probably that they themselves are next to fall. Inside the story spun out by Best Buy is the point that smartphones and tablets have meant that fewer buyers are coming to the electronic retail stores for the classic sectors of computing and TVs. As consumers we all know the desktop computer sector is dead and notebooks are quickly following (the slumping fortunes of Dell and HP also indicate this) and the golden days of the LCD cycle (do you even remember when you said goodbye to your monitor CRT or TV CRT???) are now far behind.

So for what will our modern consumer wander the aisles of a big box electronics store? Half the store filled with legacy entertainment formats (CDs, DVDs, MP3 players), passé electronics (desktop computers, TVs we already have) and the other half with overpriced accessories (hello dealextreme), AV equipment (another moribund mainstream sector best served by specialist retailers and online), white goods, cameras (digital consumer rush is over also) and a collection of random handsets equally served by the ten high street shops you pass on your walk to work from the station/carpark.

The big box brands profited greatly off the past consumer gold rushes - cashing in on the switch to LCD from CRT and the growth of personal computing. However they're failing to stake any real ground in the newest gold rush - mobile and tablet computing.

So what say you? Are we seeing the end of big box electronic retailing? Without even touching the question of pricing (which is generally ludicrous) will we be sending our kids off to PC World to buy their jetpacks 10 years hence?


  • Mike
    WTF IS DIS REAL? Is this an original and current article? What is going on.
  • Dick
    I don't think I have bought anything electrical or media related (excluding newspapers and magazines) in a store for at least three years. Fridge, oven, TV, computer, laptop, cameras, DVDs, CDs, blurays, etc. Why buy in store when you get a better deal online. I'll be buying my jetpacs online, and they will be delivered by a jetpac delivery company.
  • Steve
    I was pleased when I say a best buy was opening near me having shopped there in the US however everything I was looking for was priced at least 20% than it was availbile elsewhere, so after a couple of visits i never went back. Even PC world was cheaper than Best Buy for some things!
  • StuPid
    Actually I think there will always be a place for big box retailers, as long as people need things immediately. When I need a replacement washer, I go get it and bring it home - same with the fridge freezer - I needed a replacement there and then. It was the same situation when the TV blew, I went to Currys and bought one - I couldn't wait for the delivery (literally in the case of the fridge freezer). As long as white goods blow up, then we'll need some way of getting replacements in
  • Paul Nikkel EDITOR
    Thanks Mike ;) StuPid - What if Shutl was widespread for white goods companies?
  • zdm
    You still need to see the things. Fridges are not all the same and you do need to poke around in them just to see if it is right. Same with vacuum cleaners - our's just blew up and so we went to look at them because you have to use them to know what they are like.
  • Nick T.
    I looked at Best Buy when I needed a vacuum cleaner and they were 10-20% more than Amazon, Currys, even the Co-op. Did they think people would shop there just because they were Best Buy?
  • Lawrence S.
    Like many other excited customers, I was caught up in the frenzy of the first day of Best Buy opening its store in Thurrock Lakeside. I bought one or two things at opening offer prices and visited several times over the course of the next few months. But, like StuPid above, I soon realised that Best Buy were trying to sell most things at full rrp and I hardly go there any more and certainly haven't bought anything there for a while. Good customer service is important, and it's helpful to be able to see things working and imagine how they would fit into your home; but what matters most is price. If you know that you can get the very same thing online for 20% less than what you would pay in Best Buy, then it's a no-brainer for most people, even though you may find it more difficult to get repairs or refunds for faulty goods. In fact, Lakeside has far too much provision for Electrical and Electronic goods. On the retail park, you already had a large PC World, the largest Currys in the UK and a small Comet, and that was before Best Buy moved in. Supermarkets are now competing in this sector too and in a long period of austerity for most it's hard to see how so many providers of 'luxury' or discretional items can continue. I suspect that, without being too dramatic, that some seismic shifts will take place in retailing over the next decade or so, and that many of our out of town retail parks will begin to look like industrial wastelands as more and more big stores pull out and retrench into city centres and online operations.
  • Sicknote
    Damn you to hell Best Buy; I'll now have to go back to trialling the latest tech at Dixons or Currys before going home and ordering it on Amazon with next day delivery.
  • currentbestbuyemployeeformerdsgione
    This is the best most honest report I have ever seen BW do - honest in that you were routing for us from the start, and that reality has kicked in you are clear with some facts perhaps unseen. It sure is a sad day... right place, sadly the wrong time. To all those saying "I go in and look before buying online" - the day will come where that option will not be there. Good luck!!
  • The B.
    I've bought stuff from BestBuy, a nice panny TZ series, did I go in the shop to do it? Are you mental? I did it on-line using a code and got topcashback and the £50 Panny cashback. Never been in a Bestbuy store.
  • JonB
    Those who buy big box goods can still view them in department stores before buying online. The department stores need to differentiate to get the actual custom, and can do this by offering decent credit plans and warranties. Case in point: I bought my latest TV from John Lewis because I could get it the same day and it had a free 5 year warranty on it - something online retailers couldn't match. The days of soulless retail park stores with pushy sales assistants may well be over - and not too soon as far as I'm concerned.
  • Brad
    I stated when they first started that if all they were going to do was fall into line with the rest of them, offering the odd deal or few quid here or there then they will fail. (honest I did! look back at the older posts!) Instead they actually seemed quite expensive at times and didn't offer anything too different. Proved me wrong....
  • commy
    Dixons have just opened the largest repair facility for flat panel TVs and computers in Europe, Comet have just closed a large number of their repair centres. when the smoke clears from best buy going, Comet will be next. DSG will continue to shut small stores and combine the pc world and currys superstores into megastores, places like John Lewis will probably eventually move away from electronics as theres no margin to be made.
  • beorawasp
    I went there looking for a new fridge/freezer, these were 10 & 15% more than Comet directly opposite. I don't like Comet at all and I have cut my nose off to spite my face more than once but, what did it for me was the FBI agent at the door checking bags and receipts on the way out (complete with sunglasses on - inside) Do (did) they have these assholes at all stores?
  • d-s-g e.
    Yeah we got internal memos from John Browett and Alan Ritchie crowing about how we whipped best buys asses, only in more acceptable corporate buzzspeak. They seem to think its customer service we beat them on. Still feel bad for my fellow retail wageslaves who will be without a job come January
  • Paul Nikkel EDITOR
    @d-s-g - Anything you can send us? [email protected]
  • ExComet2
    It shows how bad big box retailing is in the UK that Best Buy with their Manchester City wealth and power have failed abysmally to make any impact . COMET and DSG should not shout to loudly with this major player out the way . They did not beat them. The real winners in the UK are the Online Retailers and the major Supermarkets who are eating the big box players small profits (if any nowadays) like frenzied piranha. COMET and DSG have both decimated their UK service infostructure (to save money) and a rebranding exercise that has cost millions and have assigned many of their skilled engineering staff to the dole queue. Both of these two boast of having fantastic customer service , but putting that into practice when things go wrong for a customer is another story. They cannot survive by selling MONSTER CABLES (tm) for much longer. Who is next to go ?
  • Delenn
    Stay classy Dixons
  • Seeeeeeeeee
    Remaining big box retailers have got nothing to celebrate. They will all follow and sooner than later. There strategy of brainwashing their poorly paid sales advisers with "Whatever Happens" etc etc & high profit add on's will bury them once and forever. I recently witnessed a frail OAP in Curry's break down in tears after the relentless pressure from a pushy sales person so much so I had to step in and save the poor women from further distress.
  • ByeByeComet
    Well, Comet have just been sold for £2 by KESA and they are also giving the new company £50 million. The buyers have promised not to close Comet down for 18 months. Bye Bye Comet!
  • Tim
    PC World is doomed and now integrated in the same shop as Currys they'll take each other with them. Even for browsing products before buying them online cheaper, they're not worth the effort now as the quantity of stock has been dramatically reduced. There's not much there to browse now that's of interest. Same applies to most of the high street though. The future will be there are no shops, we don't get out of the house, and all is delivered to us. I recall some sci fi stories predicting a future something like this where people forget there is an outside world.
  • FatSpottyPS3FanBoi
    What is this 'outside world' of which you speak?
  • ExComet2
    Information on OpCapita OpCapita LLP is a private investment firm that focuses on operational change opportunities in the European retail and consumer sectors. The firm's partnership combines financial expertise with in-house operating partners who have strong operational track records. OpCapita acquires and invests in companies that are strategically sound but represent performance improvement opportunities where the potential exists to create long-term, sustainable value. OpCapita have been circling COMET for some time, they are obviously after something. Have COMET any assets left ? that is another question for another day. Could they be following BestBuy ? only time will tell. COMET will retain their senior management team (What a surprise that is)
  • BestBuyFan
    I'm gonna miss those blue uniformed sales guys.
  • Paul Nikkel EDITOR
    @ExComet2 - For sure they are trying to groom Comet for sale - that's why Kesa passed it on in the way they did. The big question would be to whom are they going to sell in 2 years? I don't see many big retail chains being interested now that Best Buy left. Unless it's another PE firm I don't see a sale being terribly pursued by other retail groups (ie Home Retail Group).
  • ExComet2
    Yes indeed Paul who would buy COMET ? that is the question. The gold rush days for high st retailing and out of town mega stores seem to be all but over. COMET is a brand name known to everyone and should have been able to stand on its own feet. Its blindness in trying to compete with, and copy DSG over the years has now taken its toll. COMET must have thought christmas had come early regarding the retreat of BestBuy. COMETS failure with a massive rebranding exercise (oncall) which did not result in any extra external service contracts ie HRG or any of the major supermarkets. It did at one time have a UK Service stucture which should have been unbeatable if it had been run correctly , that is no more but they will have you believe it is still in place. Perhaps this sale if it goes ahead will be the best thing that ever happened for them as Opcapita are very good at what they do one way or another ! I am sure COMETS top heavy management stucture will be having sleepless nights . I understand that COMET was sold for £1.00 the other £1.00 was for Triptych Insurance N.V. regarding the hundreds of thousand of customer warranties that are in place. It is also interesting to note a major bank now involved ,which I had to "google" to find out more information which is mentioned in some of the terms of the forthcoming sale to Opcapita , The disposal is conditional, amongst other things, on: (a) the passing of an ordinary resolution by Ordinary Shareholders at the Company's Extraordinary General Meeting approving the disposal; (b) receipt of appropriate clearance from the Pensions Regulator; and (c) consent from the Central Bank of Curaçao and St. Maarten in relation to Triptych Insurance N.V., in accordance with Curaçao law.
  • klingelton
    Dixons and it's brands aren't going anywhere soon, they'll be around long after Comet and BestBuy go and they are performing better than most electrical retail stores in this climate, they have done well to march on and there are more Megastore's to be opened. 2-in-1 stores have been a goal for Currys/PC World for a long long time, it's not something that's happening now because of a shit economy, though it does help. There will also be millions of people every year buying expensive HDMI cables or USB A/B cables and people will continue to buy their hardware in a these retail stores and as long as people are willing Dixons will remain. There will always be Dixons nay sayers just like any other company but it's not you they care about because for every 1 of you there are 10 willing customers that will buy from us not just because they love our brand but because of a brilliant service from many people who know what they are talking about.
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  • ExComet2
    Eh , whats all that about ? keep taking the tablets pandora , do you not sleep ?
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