Best Buy CEO expects headwinds but not a ‘full recession’ ahead
Best Buy CEO Corie Barry is well aware of the challenges the consumer electronics chain faces in the current economic environment. She’s also confident that the steps the retailer is taking to get closer to its customers will lead to long-term success.
The retailer this week reported that its first-quarter year-over-year sales were down eight percent compared to a pandemic and federal stimulus-driven gain of more than 37 percent in 2021.
Ms. Barrie, speaking this week on an earnings call with analysts, assessed the short-term challenges faced by Best Buy and its prospects.
“The last two years have clearly underscored the importance of tech in people’s lives. So, I think it’s important for us to have that as a backdrop,” said Ms. Barrie. Best Buy, she said, expects “a softer environment” in 2022 but does not see a “full recession” as a fait accompli.
Ms. Barrie pointed to a lot of first-quarter positives that Best Buy plans to continue building on.
“We grew our Totaltech membership, increased momentum in our health business, launched new product categories and reached our fastest ever Q1 average online sales delivery speed,” she said.
Best Buy’s CEO said that omnichannel initiatives and service levels continue to set the company apart in the minds of consumers.
“While customers have returned to physical stores to see and touch products and get advice, our digital engagement with customers remains very high,” she said. “Our online sales as a percentage of domestic sales are 31 percent, still twice as high as pre-pandemic levels and revenue from virtual phone and chat interactions continues to increase rapidly.”
Ms. Barrie said the chain has expanded engagement with customers in their homes with installations and consultations “up significantly.”
Best Buy earned its “highest ever” net promoter score during the quarter from customers making in-store purchases and taking advantage of store-based services.
The retailer has also navigated supply chain challenges that have left many others reeling.
“We have employed a portfolio approach as it relates to carriers, transportation partners and parcel delivery partners. And we have built deep relationships across our supply chain, including port carriers and deconsolidation operations,” said Ms. Barrie.
The retailer has “strategically leveraged” over-the-road and rail to move product quickly and to the right destinations.
“All of this,” Ms. Barrie said, “has helped us to drive capacity, avoid large-scale disruption and mitigate cost increases.”
- Best Buy Reports First Quarter Results – Best Buy
- Best Buy (BBY) 24 May 222023 Q1 Earnings call transcript – docoh
DISCUSSION QUESTIONS: Do you think Corie Barrie is clear-eyed about the challenges and opportunities for Best Buy over the near and longer term, or do you expect a recession to darken the horizon? Where do you see the biggest opportunities for the chain to continue growing?