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.
Best Buy recently put up the list of competitors it will price match. This seems like the last straw for the struggling electronics retailer. Best Buy has been struggling for a number of years, as the competition for electronics and entertainment has ramped up. As prices have come down for many items, and the mix of products within the stores has changed over time, margins have compressed. Although price matching with HH Gregg, Target, Hewlett-Packard, or Sears seems rational, doing that with Amazon.com or newegg seems disastrous. Best Buy looks like a classic value trap. It has strong brand name and is fairly well run, but it’s fundamentally a declining business.