Largest Retailer In US Closing Stores

Summary

The US's largest electronics retailer, Best Buy, is closing some of its stores due to a 2.3% drop in sales. This move is part of a strategic shift towards opening smaller, more focused stores, likely to sell smaller electronics while larger items will be ordered online for home delivery or in-store pickup. Despite Amazon's revenue miss, Walmart sees stable consumer health, suggesting that consumers are prioritizing essential goods over electronics. This restructuring reflects a broader trend in retail, adapting to consumer behavior and economic shifts.

Takeaways

• 🏬 One of the largest retailers in the United States is closing some of its stores.
• 📉 The retailer's sales dropped by 2.3% in the second quarter, prompting store closures.
• 🛒 The company plans to focus on opening smaller stores instead of running larger ones.
• 📱 The shift is due to the increasing trend of ordering large items online for home delivery.
• 📈 Other retailers like GameStop, Sears, Walgreens, CVS, TGI Fridays, Foot Locker, and Pizza Hut are also closing stores.
• 📊 Amazon's revenue missed expectations, suggesting consumers are not spending as much as before.
• 🛒 Walmart is seeing stable consumer health, possibly due to selling essential items like food.
• 🔄 Consumers are shifting their spending towards essential goods rather than electronics or non-essentials.
• 📊 Best Buy had 1,779 stores at its peak in 2013 and is now down to 1,125.
• 🏢 The trend of restructuring is not unique to Best Buy; other stores are also downsizing or changing their focus.

Q & A

Which major US retailer is mentioned in the script that is closing some of its stores?

The major US retailer mentioned is Best Buy.

How does the size of Best Buy compare to other retailers like Macy's, Dollar Tree, and Nordstroms?

Best Buy is larger than Macy's, Dollar Tree, Dollar General, Nordstrom, Ride Aid, and Dick Sporting Goods.

What is Best Buy's new plan for store closures?

Best Buy plans to focus on opening smaller stores instead of running larger ones.

What is one of the reasons behind Best Buy's decision to open smaller stores?

Best Buy aims to sell larger items through online orders, which customers can then pick up in-store or have delivered to their homes.

How did Best Buy's sales perform in the second quarter as mentioned in the script?

Best Buy's sales dropped by 2.3% in the second quarter according to their latest earnings call.

What is the script's explanation for Amazon's revenue miss?

The script suggests that consumers are not buying as much as they used to, leading to Amazon's revenue miss.

Why is Walmart performing better than Amazon according to the script?

Walmart sells essential items like food, produce, and meat, which Amazon does not sell as extensively, leading to stable consumer health for Walmart.

What does the script suggest about consumers' spending habits?

Consumers are spending money on essentials rather than non-essential items.

How many stores did Best Buy have at its peak in 2013, and how many does it have now?

Best Buy had 1,779 stores at its peak in 2013 and is now down to 1,125.

What is the significance of Best Buy being the number 16 store on the list of largest retailers in the US?

Being number 16 signifies that Best Buy is among the top retailers in the US with a revenue of 43.1 billion as of 2023.

What does the script suggest about the future of Best Buy's product offerings?

The script suggests that Best Buy might focus on selling smaller home electronics and get rid of larger items like refrigerators and washing machines.

Outlines

00:00

🛒 Closure and Restructuring of Major US Retailer

The script discusses the closure of stores by one of the largest retailers in the United States, Best Buy. Despite being larger than Macy's, Dollar Tree, Dollar General, Nordstrom, Ride Aid, and Dick Sporting Goods, Best Buy is closing some of its stores. The script suggests that this is part of a larger trend of store closures due to financial struggles, naming other retailers like GameStop, Sears, Walgreens, CVS, TGI Fridays, Foot Locker, and Pizza Hut. Best Buy's sales dropped by 2.3% in the second quarter, leading to plans to close more stores after initially announcing the closure of 24 stores nationwide. The company is shifting its strategy to focus on opening smaller stores instead of maintaining larger ones. This is attributed to the trend of ordering larger items online for home delivery or in-store pickup. The script also contrasts Best Buy's struggles with Amazon's revenue miss and Walmart's stable consumer health, suggesting that consumers are spending more on essentials like food and household items, which Amazon does not sell as extensively.

05:01

📉 Decline in Store Numbers and Shift in Retail Strategy

The second paragraph delves into the decline of Best Buy's store count from a peak of 1,779 to 1,125, a substantial decrease. It discusses a comment from a store owner who was offered a larger space at the same price due to other tenants reducing their store sizes. This reflects a trend of retailers restructuring to minimize risk and focus on more profitable items. The script mentions Walmart's renovation phase to make its stores appear smaller and full, even with less inventory. It also discusses how stores are restructuring to sell more profitable items and get rid of less popular ones. The example of a touristy store is given, where they decided to focus on selling toys, board games, and ice cream instead of shoes. The script concludes by sharing that Best Buy is the 16th largest retailer in the United States as of 2023, with a revenue of 43.1 billion, and invites viewers to ask questions and engage in the discussion.

Keywords

💡Retailer

A retailer is a person or company that sells goods or services to consumers for personal use. In the script, the term 'retailer' is used to describe various businesses like Best Buy, which is a major US electronics retailer, and how it is adapting its business model by closing larger stores and opening smaller, more focused ones to stay competitive in the market.

💡Store Closures

Store closures refer to the permanent shutdown of physical retail locations. The script mentions that Best Buy, among other retailers, is closing stores due to financial struggles and changing consumer behaviors. This is a common trend as more shoppers move online, and retailers optimize their physical footprint [^2^].

💡Best Buy

Best Buy is identified as the nation's largest electronics retailer in the transcript. It is noted for its plan to close larger stores and open smaller ones, focusing on selling items that are often ordered online for delivery, thus adapting to the digital age and consumer preferences.

💡Sales Drop

A sales drop indicates a decrease in the total revenue generated from sales. The script highlights that Best Buy experienced a 2.3% drop in sales during the second quarter, which is part of the reason for the company's strategic decision to close some of its stores and shift its business model.

💡Smaller Stores

The concept of 'smaller stores' is introduced as part of Best Buy's new plan. These are more focused retail spaces that handle a specific range of products or services, often with an emphasis on in-store pickup for online orders or selling smaller, more frequently purchased items [^2^].

💡Amazon

Amazon is mentioned as a significant player in the retail industry, particularly in e-commerce. The script suggests that while Amazon's revenue has missed expectations, it is still a major competitor to brick-and-mortar stores like Best Buy, influencing the way consumers shop for electronics and other goods.

💡Consumer Behavior

Consumer behavior refers to how consumers make decisions and what influences their purchasing choices. The script discusses how consumer behavior is shifting, with people increasingly buying essentials like food and household items from places like Walmart, rather than from online retailers like Amazon, which do not sell these items as extensively [^2^].

💡Restructuring

Restructuring in a retail context usually means reorganizing the business operations to improve efficiency or adapt to market changes. The script uses the term to describe how Best Buy and other retailers are changing their business models, such as by reducing the size of their stores or the range of products they sell, to stay relevant and profitable.

💡Inventory

Inventory refers to the goods that a retailer has on hand to sell. The script mentions that some retailers are running out of inventory or choosing to minimize it, which can be a strategic decision to reduce costs and risks, especially for items that have slower turnover rates or are bulky to store [^2^].

💡Profitable Items

Profitable items are those products that generate the most revenue or highest profit margins for a retailer. The script suggests that Best Buy might focus more on selling profitable items, such as TVs and smaller electronics, and potentially stop selling larger items like refrigerators and washing machines that require more storage space and have lower profit margins.

Highlights

A major US retailer is closing stores, signaling a shift in retail strategy.

The retailer in question is larger than Macy's, Dollar Tree, and Nordstroms.

The company is Best Buy, a leading electronics retailer, planning to close 24 stores nationwide.

Best Buy's sales dropped by 2.3% in the second quarter according to their latest earnings call.

The company plans to focus on opening smaller stores instead of maintaining larger ones.

Large items like refrigerators and HVAC systems will be ordered online for pickup or home delivery.

The shift is due to consumers increasingly purchasing such items online.

Amazon's revenue miss and disappointing guidance indicate a change in consumer spending habits.

Walmart, in contrast, is seeing stable consumer health, possibly due to selling essential goods.

Consumers are spending more on essentials like food and household items.

Best Buy is not just losing customers to Amazon but also to stores that sell essentials.

Best Buy had 1,779 stores at its peak in 2013 and is now down to 1,125.

A smaller shoe store owner received a proposal to take a larger space in the mall for the same price.

Walmart previously renovated to make stores look fuller despite having less inventory.

Stores are restructuring to sell more profitable items and get rid of less popular ones.

Best Buy might focus on selling TVs and smaller electronics, abandoning larger appliances.

Best Buy ranks as the 16th largest retailer in the United States with $43.1 billion in revenue.

The changes give insight into consumer behavior and business planning in the retail sector.

Transcripts

so one of the largest retailers in the

United States is now closing some of

their stores but the reason why they're

closing some of their stores and what

their new plan is is very interesting

now I want to break this down because

this store it's bigger than Macy's it's

bigger than the Dollar Tree or Dollar

General it's bigger than Nordstoms this

is bigger than Ride Aid and even Dick

Sporting Goods this is a major US

retailer that is now closing its doors

but again I'm going to break all this

down in just a moment explain why this

is actually good news but also explain

what is going on and how this is going

to transition moving forward so I'll

break all this down in just a moment but

all I ask is one thing it takes two

seconds go ahead hit that like button if

you enjoy these daily updates and now

let's

begin so first off stores are closing

that's nothing new that shouldn't be

shocking to millions of millions of

people that is just the reality of our

current economy but here's what you need

to know the nation's largest electronics

retailer is going to close stores I want

to read a little bit of this article

because this right here is very telling

of what's to come look at this right

here it says it seems every week another

retailer announces store closers due to

financial struggles GameStop Sears

Walgreens CVS TGI Fridays Foot Locker

Pizza Hut Boston Market and rate are

just a few of the many companies that

have had to shutter locations this goes

on to say earlier this year to help with

their financial issues the company

announced plans to close 24 stores

nationwide that is Best Buy Best Buy

Clos 24 stores nationwide now they plan

on closing more stores look at this

though and this is the reason why I want

to show you this okay it says their

sales dropped by 2.3% in the second

quarter that was according to their

latest earnings call but this is what I

want to show you right here it

says in addition to closures best by

plans to focus more on opening smaller

stores as opposed to running larger ones

why would they do that why would they

decide to open smaller stores as opposed

to running large ones it's simple a lot

of the items that they're now going to

be selling especially larger items you

will have to get them ordered think

about store like Costco if it's a large

item such as uh let's say new you know

refrigerator especially if it's not one

of their the ones that they keep in

stock but it's maybe a washer dryer uh

maybe it's the the you know standup dry

cleaner thing that they sell now maybe

it's a a new HVAC system again all these

things that they sell well you got to

order those online you got to pay either

in store or you order them online

they'll you send it to the store and you

can pick it up or they'll send it right

to your house that's what Best Buy is

going to plan to do but I want to show

you something because a lot of people

are saying that the reason why Best Buy

struggling is because everyone's

purchasing items on Amazon well look at

this I want to show you this really

quick Amazon shares slide on Revenue

Miss disappointing guidance for third

quarter

now why is Amazon uh showing that they

had a revenue Miss simple the consumers

are not buying what they used to

Consumers not spending the kind of money

that they used to but look at this one

right here Walmart beats estimates

raises Outlook as it sees stable

consumer health so Walmart is seeing

stable consumer health but Amazon isn't

interesting now what could be the result

for that well it's simple Walmart sells

food they sell produce they sell meat

does Amazon not really they sell box

Goods okay they sell things in cans but

they don't sell meat and fresh fruit and

produce they don't do that now I want to

read that to you and explain what's

going on because that's going to kind of

show you where consumers are spending

they are spending money on Essentials

listen to this this person says Best Buy

is losing customers not just to Amazon

because they ship to a person's home but

to stores that also sell Essentials like

food and household items that's exactly

what we are

seeing now I want to read you this

comment here and the reason why I'm

reading this comment is because of what

this article just said where Best Buy

plans to focus more on opening smaller

stores as opposed to running larger ones

keep in mind that at its peak in 2013

Best Buy had 1 ,

779 stores they're now down to

1,125 that's a pretty substantial

decrease what

6 54 stores yeah it's pretty substantial

listen to this comment this person

writes and says this and I quote I know

you have talked about stores closing and

major restructuring quite a bit lately

but I want to give you my two cents as

well I own a smaller shoe store inside

blank and blank outlet mall in

California and I had a very interesting

proposal from my landlord my landlord

released to me a larger space for the

exact same price but I wondered what was

the catch he informed me three other

tenants didn't need such a big space and

have decided to reduce the size of their

stores as a result the reduction by them

will create a larger store for me I'm

not sure if this is a good thing or a

bad thing and any insight would be

greatly appreciated now I've seen this

before we saw this and I I addressed

this here on this channel probably two

years ago where Walmart was going

through a renovation phase where they

were actually building out the back of

their store so the the kind of the

warehousing part of their their store

where they keep all their products that

are not on the shelves well what Walmart

was doing instead of removing shelves

and making Idols wider which they did

that as well but instead of just doing

that what they decide to do was build

out the back of their store and push the

wall closer to the front which guess

what it did it made the store's

footprint smaller and if the stores look

smaller then if they have a kind of a a

lack of inventory it doesn't look like

they are they were just robbed it still

looks full so that's what Walmart was

doing before that's what stores are

starting to do now they're running out

of inventory to sell or they're trying

to minimize their risk getting rid of

items that they no longer need for

instance I went into a uh there's kind

of a uh like a touristy store in a in a

kind of lak town um you know City nearby

and and one of the things I noticed was

the store built out their ice cream shop

in the back number one because it was

more profitable number two because they

didn't sell shoes anymore they were

selling like flip-flops and and Crocs

and things like that but they decided

we're not going to sell that because

those are not selling so we're going to

get rid of that part of our store and

we're going to sell more toys board

games and more ice cream that's what

they decide to do so again stores are

just going through a kind of

restructuring phase where they're trying

to sell their more profitable items and

get rid of everything else that's

exactly what we're seeing here with Best

Buy Best Buy might not sell

refrigerators anymore they might not

sell washing machines or dryers they may

decide we're just going to sell TVs and

smaller home electronics so we'll see

what happens there but I just want to

share this with you because Best Buy is

the number uh 16 store on the list these

are the lists as of 2023 the largest

retailers in the United States we got

Walmart number one Amazon number two

Costco number three and down here at

number 16 we have Best Buy

43.1 uh billion so that is what we know

as of today I just wanted to share this

with you because again this gives us a

little bit insight as to what consumers

are doing and thinking but also what

businesses are planning to do as well if

you have any questions whatsoever please

ask your questions down in the comment

section below but again thank you guys

for watching consider subscribing and

I'll see you guys on the next one