Best Buy's Inevitable Decline

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

David does not think Best Buy will be able to turn things around. First, e-commerce won't be stopped, and it's leaving Best Buy behind. Also, product companies like Apple don't really need Best Buy to sell their wares anymore. Most worrying of all -- Best Buy is becoming irrelevant. Customers just don't need their expertise anymore when looking to make a purchase. Sadly, the move away from big-box retailing is just too strong for Best Buy.

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David Meier owns shares of Apple. John Reeves owns shares of Apple. The Motley Fool owns shares of Apple,, Best Buy, and TripAdvisor. Motley Fool newsletter services recommend, Apple, and TripAdvisor . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On May 31, 2012, at 9:11 AM, beta2uralpha wrote:

    BBY's turnaround plan is basically to cut its big box footprint. Great strategy if you think that competing with Radio-Shack (RSH) is a good idea.

    Big Box square footage is what allows BBY to have things like the "Apple store within a store." Apple revenue is a major driver for the company, but a revenue source that will be seriously diluted as Apple branches out to places like Target.

    BBY needs to focus on developing exclusive agreements with major manufacturers in order to compete and not on cutting footprint, which essentially turns them into the next Radio-Shack...and we see how well Radio-Shack is doing right now...

  • Report this Comment On June 01, 2012, at 1:37 AM, jason092201 wrote:

    When did The Fool and BBY break up? What did BBY ever do to The Motley Fool? Every story I read here is so doom and gloom when even The Fool's readers think BBY will outperform 4 to 1. What reason does The Fool have to pump up Amazon? The Fool seems to have a crush on AMZN after their break up with BBY even though AMZN operates with razor thin margins if there are any margins at all and multiples that are out this world. AMZN is a much bigger threat to broadline retailers like Sears, Kmart, Target, Wal Mart etc, not a specialty like BBY. Not to mention how remarkably unremarkable AMZN is and the huge competition it faces. We haven't even started to talk about Target not carrying their product or EBAY or dozens of other sites just like it. Oh yeah and there is sales tax on the horizon too. Don't follow the Fools because their love affair with AMZN is going to be over as soon as their affair with BBY.

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