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Continued: Best Buy stock soars despite persistent weak sales

  • Article by: THOMAS LEE , Star Tribune
  • Last update: August 20, 2013 - 11:01 PM

Best Buy hopes the new features will encourage shoppers to buy, not just browse. Of the 1 billion visits to bestbuy.com in 2010, only 1.3 percent purchased something. Nine percent of the customers wanted to buy products but didn’t because they needed more information or the product was not available.

“Best Buy doesn’t have a traffic problem” with their stores or website, said Peter Keith, a New York-based retail analyst with Piper Jaffray & Co. “It’s fairly robust.”

But converting those visits into sales won’t come easy — or cheap. Matching competitor prices keeps cost-­conscious consumers from fleeing to rival retailers, but they also erode Best Buy’s profits. While the company does not offer profit forecasts, Best Buy did suggest that such declines will continue well into the next year.

“Price competitiveness remains in place,” Keith said. “At this point [matching prices] seems to be the right move.”

 

Thomas Lee • 612-673-4113

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