Way to kick a big-boxer when it’s down, Walmart.
The Bentonville, Ark.-based retailer has unleashed print and radio advertising making sure consumers know their local Best Buy is closing, and inciting them to head on over to Walmart for good deals in electronics. Some spots especially trumpet mobile phone offerings, an area that the struggling Best Buy has laid out as its likely salvation.
The Minneapolis Star-Tribune reports that print ads read: “Did your local Best Buy just close? We have the top brands and low prices.” And radio spots ask the same question, and include a conversation with a Walmart shopper about specials on brands phones, including Samsung. “Wow,” she says. I didn’t know Walmart had those.”
The move comes at a rough time for Best Buy. Sales are still sliding, with comparable-store results down 5.3% in its recently announced fiscal first-quarter results, and it is in the midst of shutting down 50 of its big-box stores and laying off hundreds of employees. It plans to reduce costs by $800 million over the next three years -- investing those savings in smaller-format stores, including Best Buy Mobile stores and Connected Stores.
And just last week, it announced it was retaining Spencer Stuart to help it find its next CEO, as the Minneapolis chain is still reeling from embarrassing management upheaval. First, chief executive Brian Dunn resigned in April, amid allegations that he had an inappropriate relationship with a female staffer. Then in mid-May, founder Richard Schulze, chairman, stepped down as well, when an internal investigation revealed that he knew of that relationship but did not report it.
But Best Buy’s troubles started before all that. In fact, pundits and analysts have been piling on the chain for months now, including an influential Forbes piece called “Why Best Buy is going out of business …gradually,” which draws many comparisons between its business model and the now-kaput Circuit City.
By comparison, Walmart is on the upswing again, reporting higher profits for the first quarter and same-store sales gain of 2.6%, better than many had expected.
Neither Walmart nor Best Buy responded to our emails asking for comment.