Best Buy blames sales and supply chain issues for holiday sales decline

Industry News

Electronics giant Best Buy recently released its holiday earnings report, which ended on Jan. 4. Although the retailer reported $11.45 million in revenue during the nine-week period, that figure was down slightly compared to the 2012 holiday season, during which Best Buy earned $11.75 million.

Best Buy blamed aggressive sales throughout the holiday season as well as supply chain constraints and less in-store traffic due to poor weather.

Best Buy blamed aggressive sales throughout the holiday season as well as supply chain constraints and less in-store traffic due to poor weather

“When we entered the holiday season, we said that price competitiveness was table stakes and an intensely promotional holiday season is what unfolded,” said Hubert Joly, Best Buy’s president and CEO.

Learning for the future

Best Buy wasn’t the only retailer that observed this trend. Many merchants found they had to aggressively slash prices. On the one had, this tactic can win new sales, but on the other, it can negatively affect revenue.

Better supply chain and inventory management is one way merchants can help mitigate or minimize some of the negative effects of this strategy. By understanding which items are selling at full price and which aren’t, merchants can better manage their supply chain and coordinate sales on products that need to be offloaded without giving up big margins.

The other issue Best Buy cited – supply chain constraints – can also be addressed partly through the use of eCommerce software. If retailers use a solution that consolidates all of their cross-channel activity, they will be in a better position to quickly and seamlessly fill orders as well as manage the flow of inventory from one warehouse to the next. This can lead to fewer stock outages and faster delivery.

Best Buy blames sales and supply chain issues for holiday sales decline

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