Minneapolis – Best Buy Co., Inc. saw its revenues for the nine-week holiday period ended Jan. 4, 2014 fall 2.5% from the same period a year earlier. Holiday revenues for the 2013 season were $11.45 billion, compared to $11.75 billion in the 2012 season.
Consolidated same-store sales only grew 0.1%, although online sales increased 23.5%. Best Buy cited a more intense than expected promotional pricing environment as a key factor in its disappointing holiday results.
“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 president and CEO. “In both channels, the promotional intensity that began with Black Friday continued throughout the period, which led us and our competitors to answer one question, do we make the incremental investment necessary to be price competitive and defend our market share? For us, there was only one answer. To advance our Renew Blue transformation, it was imperative that we live up to our customer promises and one of these promises is to offer our customers competitive prices.”
Best Buy now expects a decrease in fourth quarter operating income rate, although the retailer said it gained market share during the holiday period.