Largest Retailer In US Closing Stores
Summary
TLDRThe 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
🛒 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.
📉 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.
Mindmap
Keywords
💡Retailer
💡Store Closures
💡Best Buy
💡Sales Drop
💡Smaller Stores
💡Amazon
💡Consumer Behavior
💡Restructuring
💡Inventory
💡Profitable Items
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
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