So far, it’s failed in both markets — mainly because consumers don’t like mega stores. After a few months of speculation, today Reuters reports that it’s likely Best Buy will abandon its stores in the UK altogether, blaming the move on the ” economic downturn, low brand recognition and a stiff competition from British market.”.
Best Buy exited China in 2011, with market failure attributed to the negative impacts of counterfeit markets, pricing, and its big-box retailer format. With its growing middle class and proximity to electronics manufacturers, China represented a huge growth opportunity for Best Buy.
Moreover, what’s wrong with Best Buy?
Best Buy expanded rapidly in the ’90s by buying up smaller chains and transforming them into its big-box format, a strategy that worked well — until it didn’t. “The problem with the creation of the big stores is that Best Buy is now saddled with the costs of that vast square footage,” Chen said. And Best Buy failed to look far enough down the road.
Best Buy wasn’t visible enough. It attempted to go up against major retailers with exponentially more stores. Dixon’s Retail has 600 stores, and Comet has 250, compared to Best Buy’s mere 11. “The market for electricals is too small in the UK for three major retailers.
We learned best Buy had huge plans to move into Europe and China . So far, it’s failed in both markets — mainly because consumers don’t like mega stores.
While I was reading we ran into the inquiry “Is best buy’s demand slowing this year?”.
Best Buy expects demand to slow this year, however. The company also said Thursday that it closed 20 of its big-box stores in each of the past two years and expects to close a higher number this year.
Why did Best Buy close down all its stores?
But the expected flood of customers failed to materialize . Instead, after struggling for six years, the company had a meager 1.8% market share, Best Buy closed down all six branded stores in 2011. The firm had already bought out Five Star Appliance in 2008 to propel its growth in the Chinese market.
The next thing we asked ourselves was; why is Best Buy closing all of its big box stores?
Best Buy’s attempt to cross the Atlantic and deliver US-style retailing to British consumers has failed miserably, with the retailer planning to close all of its big box stores in the UK.
What happened to Best Buy’s UK expansion?
But in the years after the 2008 financial crisis , one part of Best Buy’s recovery plan failed spectacularly: its expansion into the United Kingdom. After just two years, the company closed its 11 big-box stores and exited the country.