I may be alone in worrying about consumer electronics giant Best Buy (NYSE:BBY). After all, when it comes to hot shopping trends this holiday season it seems as though all roads lead to Best Buy.
Want to upgrade to a plasma television set? Check. Still unsure over whether to go with Sirius (NASDAQ:SIRI) or XM Satellite Radio (NASDAQ:XMSR) in upgrading your listening pleasure? No problem. Nintendo DS in short supply so you're looking to add some of the hot new releases on established formats? Got it.
Tack on the affordably priced pay-as-you-go prepaid wireless phones, TiVo (NASDAQ:TIVO) recorders and all of those new DVD collections, and it's a safe bet that the Best Buy parking lot will be more packed than an SUV dealer's showroom.
Yet wasn't Circuit City (NYSE:CC) dealing with that same kind of tailwind when it spooked investors earlier this month? I know, they are two different beasts and Circuit City has struggled even while category killer Best Buy has thrived, but did anyone else notice that despite a healthy November quarter same-store sales during that period inched up by just 3.2% -- far off the 8.6% spike in comps it had posted a year earlier?
I'm not suggesting that it's time to throw in the towel on the popular Motley Fool Stock Advisor recommendation. Yet the surge in demand for consumer electronics hasn't so much helped Best Buy as it has armed more conventional retailers in order to nibble away at the market share. Yes, you can get a satellite radio at Wal-Mart (NYSE:WMT). Yes, consumer-direct computer makers will deliver that plasma TV you wanted. Even Federated Department Stores' (NYSE:FD) Bloomingdale's chain has beefed up its consumer electronics offerings this year.
This doesn't mean that Wal-Mart will do to consumer electronics what it did to toy stores or what online shopping did to traditional bookstores. However, if history is any kind of teacher I remember back in the 1990s thinking that video game specialist Babbage's would rule as next generation video game platforms began to gain traction -- only to find that just about every other retailer in the mall soon was selling the hot new video games.
So, no, don't give up on Best Buy. Not yet. But don't assume that the competition isn't taking notes -- and getting smarter and hungrier.
Find yourself drooling at the living room setups at your local Best Buy or Circuit City? Want to know how you too can get hooked up with the latest gadgetry? All this and more -- in the Help With This Home Theater discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz had a different idea of home theater. It's called watching his two sons argue. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
