The "big is beautiful" era of American consumerism may be over. Many companies known for their gigantic presences now seek to leave daintier footprints on the retail landscape. If you hold big-box stocks, this adjustment might prove painful for your portfolio.
The company's strategy includes opening 600 to 800 Best Buy Mobile stores in the next five years. Aggressive expansion of Best Buy Mobile sounds like a major threat to RadioShack
Best Buy's not the only company eyeing growth by shrinking its stores. Wal-Mart's
Warring on the Web
Dot-com bubble predictions that online shopping would devastate or entirely replace bricks-and-mortar stores may not have come true immediately, but they weren't necessarily wrong. E-commerce powerhouse Amazon.com
Though Best Buy seems to have its big-box back to the wall at present, long-term investors still might not want to rule out this stock idea. It currently trades at just about 10 times earnings, and its PEG ratio of 0.81 implies it's a bargain. It may take awhile for Best Buy to get its groove back, but I doubt its future prospects are as grim as everyone seems to believe right now. Plus, the company's clearly willing to try to change its ways to adjust to changing times.
As for the overall big-box model, perhaps we're simply running out of room for them. Their massive footprint arguably doesn't help them dodge attacks from smaller, nimble competitors, either. To stay alive and keep growing, many retailers are being forced to think outside their big boxes.
Best Buy and Wal-Mart are Motley Fool Inside Value picks. Amazon.com and Best Buy are Motley Fool Stock Advisor recommendations. Wal-Mart is also a Motley Fool Global Gains selection and a Motley Fool Income Investor pick. Motley Fool Options has recommended a diagonal call position on Wal-Mart. The Fool owns shares of Best Buy, RadioShack, and Wal-Mart. Try any of our Foolish newsletter services free for 30 days.
Alyce Lomax does not own shares of any of the companies mentioned; for more on this and other topics, check back at Fool.com, or follow her on Twitter: @AlyceLomax. 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.