Performance is off, stores are closing and executives are being shown the door at Circuit City.
Analysts contacted by The Buffalo News have said the consumer electronics retailer has simply been too slow in reacting to market changes to keep up with its main rival Best Buy.
"Best Buy is the clear leader," said Brady Lemos, a retail analyst at Morningstar. "I don't think Circuit City will put a scare into them for quite some time, if ever."
Mr. Lemos and others have pointed out that while Best Buy focused on customer-centricity initiatives and moved into services such its Geek Squad computer repair and training team, Circuit City has been operating in a business as usual mode.
Best Buy has also been more aggressive in its product and service marketing. The company is currently offering discounts on televisions for customers upgrading to hi-def and using the company's installation services. For $100, Best Buy will visit a consumer's home before the installation to discuss where the system will work best.
Circuit City seems to have been caught off-guard by the steep price drops in big screen TVs. While Best Buy and others such as Wal-Mart, Target and Costco were dropping prices quickly, Circuit City was not.
Discussion Questions: What is your assessment of the current consumer electronics marketplace? What players will emerge stronger or weaker? Where do you see Circuit City going in light of current conditions?