Growth in appliance sales helping Best Buy
Boston-based Trefis released a fairly rosy review of Best Buy a day after the release of the retailer’s quarterly results.
“To everybody’s surprise, this quarter’s performance was in sharp contrast with that of the previous quarter, when sales stayed flat year over year and the bottom line fell due to one-time charges,” the analysis said.
The group said the rest of the fiscal year “also looks positive,” pointing to U.S. consumer confidence improving, Best Buy’s better than expected Canadian business and its partnerships.
“The company is strengthening its position in growing categories, such as appliances, by expanding its store-within-a-store format,” the report said. “Best Buy began rolling out the Samsung Appliance Experience centers in its stores, and the company expects to roll out approximately 225 Samsung Open Houses [dedicated in-store display of Samsung appliances] by the end of the year. Other additions made during this quarter include home theater stores-within-a-store from Samsung and Sony.”
The investments come despite cost reductions elsewhere, which Trefis said should not be a surprise. “Appliances is the fastest growing category at Best Buy and also offers better margins than most consumer electronics categories,” the note said, citing the category’s 20.7 percent sales growth in the quarter, compared with 8 percent growth in the same period a year ago.
“As the complexity and interoperability of technology products increases, product categories such as connected homes and health and wearables are seeing momentum,” Trefis said. “These trends make Best Buy’s click-and-mortar model increasingly relevant compared to pure online competitors such as Amazon.”
Buffalo Wild Wings goes e-sports crazy
Buffalo Wild Wings is joining the e-sports craze. On Monday, the Golden Valley-based chain’s Times Square location hosted an EA Sports Madden 16 pre-release party and gave away 100 copies of the game.
The move is a smart one, according to a note released by BTIG’s Peter Saleh, Ben Parente and Brandon Ross. “The definition of ‘sports’ has changed in the millennial set, with e-sports growing in popularity”; for example, many compete on video games such as “League of Legends” with broadcasts on the Internet. There is even a larger population, they said, who follow e-sports.
The analysts believe that e-sports can bring in crowds to Wild Wings, especially in between big traditional sporting events.