Best Buy UK: Extending the retail segment
"The Best Buy Company is an American retail chain that sells a range of consumer electronic goods. The company also operates in Mexico, Canada, China, Turkey and the United Kingdom. There are more than 1,150 stores in the US, Puerto Rico, Canada, China, Mexico, and Turkey, and eight Best Buy stores in the UK. In its home country in the US, the company has captured 19% of the market share. The company is headquartered in Minnesota.
Best Buy was initially founded in 1966 by Richard Schulze and James Wheeler, under the name, Sound of Music. In1981, a tornado attacked the area and Sound of Music initiated a sale of its goods under the name Best Buy. The new name was registered and the company became the first store to sell a wide variety of discounted and branded goods. The company has expanded its operations to many countries over the years and has also made its presence felt in the United Kingdom.
The company had planned to gain entry to the UK markets in 2009 but later postponed the plans until 2010. Best Buy superstores opened in the UK in April 2010 in conjunction with the Carphone Warehouse. The first store was opened in Thurrock in Essex. Over the next few years, it plans to set up 200 stores all over the UK.
The Best Buy store was a big boon to Britain's consumer technology market. UK had longed for a fresh technology store and Best Buy was warmly welcomed to the UK marketplace. In contrast with the American way of selling electronics, wherein customers were bombarded with a range of choices, the UK mode of functioning was non-invasive, professional and helpful. The stores were following a methodology of providing assistance to customers with their selection. The 50,000-square-foot store is spacious and well-lit, and also comprises a green tech zone, that houses several electric bicycles and a Tesla Roadster.
However, the company was not able to make great inroads and hence, planned to discontinue its operations on 11 of its electrical stores in the UK after its annual losses trebled to £62m. Best Buy had posted a consecutive decline in quarterly earnings in the US and this dip could be attributed to weak consumer spending and a shift in shopping habits in the recent months. It would be interesting to watch if the store recovers from its losses and emerges as one of the leading electronic chains.