Major Retail Bankruptcies Not on Horizon

A recent Fitch Ratings report predicts a holiday season that’s better than some worst-case scenarios out there. It also says that due to liquidity improvements, we’re not likely to see retailers file the same number of bankruptcies that we did in 2008 and early this year.

However, the outfit does recognize that the consumer is still strapped. Fitch expects unemployment to reach 10.5% next year, and credit will remain tight.

Bed Bath Betters Best Buy

At least one major chain is taking advantage of the demise of its main competitor. Bed Bath and Beyond, helped by the demise last year of Linens ‘n Things, turned in a pretty good second quarter, posting a 14% profit increase, a 3% revenue jump and a same-store sales slide of less than 1%.

That’s a lot better than Best Buy has done since its main rival, Circuit City, went under. Same-store sales during the electronics chain’s second quarter fell 3.9% and earnings came in at $159 million, down from $202 million during the same year-ago period.

Best Buy’s Commercials Are Dumb

We try not to let things get to us too much around here, but every now and then, the irritation takes over. Take, for example, stupid television commercials. We aren’t in the camp that hates every TV ad out there. In fact, we think many are pretty darn creative. But for some reason, this series of Best Buy spots makes us want to smash flatscreens with a sledge hammer.

What are their marketing people thinking? We want to show the world how great our customer service is, dudes. So lets put a geeky person in…THE MIDDLE OF A STADIUM! And we’ll have the stands full of a bunch of know-it-all robot-like Best Buy employees all dressed the same, loyally belting out answers to questions about electronics. Americans, even when they’re broke, love cute, stupid stuff like this. They’ll spend money for sure! Oh yeah, and we’ll call our Twitter feed “twelpforce.” Yuck. And why do they wait until the end of the thing to say that this is a Best Buy ad?

Best Buy Slows Growth

Best Buy is opening 22 new stores in its third quarter, making the total number for the year so far planned at 43. Not surprisingly, that is way down from the 185 it opened during its last fiscal year.

Some highlights of its new stores include one in New York City’s Union Square and a fifth location in Puerto Rico. You can view the entire new-store opening list here.

The Top 100 Retailers

Stores magazine just put out its list of top 100 retailers by revenue. Wal-Mart of course, is on top, followed by Kroger, Costco, Home Depot, Target, Walgreen, CVS, Lowe’s, Sears Holdings and Best Buy in descending order.

Though it’s by no means a new phenomenon, we still get blown away by Wal-Mart’s Shaq-like size. Its nearly $406 billion in revenue last year exceeds that of the next five retailers on the list COMBINED.

Wal-Mart is also making news for its support of employer-mandated health care, which is facing opposition from the National Retail Federation, which puts out Stores. We’re not going to weigh in on the health care debate (you readers are welcome to do that), but we admire that the NRF isn’t afraid to stand up to what must be one of its largest members.

Best Buy Zeroes in on Wal-Mart

Now that Circuit City is gone, Best Buy has another target for dominance in the consumer-electronics space. Except this time it’s Wal-Mart.

A new Best Buy ad campaign features a customer calling one of its stores about details on a television. The person is calling from a Wal-Mart. Says the Best Buy representative on the phone: “You’re obviously calling us because we’re knowledgeable. We’ve got the price match guarantee, so why don’t you come on in?”

Wal-Mart Ditches Monthly Sales Reports

Monthly retail sales are going to get a lot harder to track.

The largest retailer in the world announced that it will not longer supply its monthly sales results. “The company stressed that the move is a way to focus on the long-term view, but it also allows the company to escape the volatility that sometimes comes along with reporting monthly sales,” says this article.

Maybe Best Buy Wants Circuit City Locations

Best Buy might look at vacancies left by bankrupt retailers, CEO Brad Anderson told Reuters at the World Economic Forum in Davos, Switzerland. But he did stress that the company is focused on remaining and leery of consumer spending trends.

Meanwhile, Best Buy is laying off people at its headquarters, and about 500 employees there have already taken buyouts.

Circuit City: Is There ANY Upside?

Some say there could be for other retailers.

A Dow Jones article specifically points to Best Buy as being the big winner, grabbing up to 40% of the liquidating retailer’s sales. Analysts are saying that other retailers, like Costco, Wal-Mart and Staples could stand to gain as well. So does that mean that centers with those stores as anchors will see increased traffic?

Maybe Best Buy Doesn’t Need New Stores

Best Buy is going to slow down its store growth next year, executives announced as part of their third-quarter results, which also hinted at layoffs and corporate-employee buyouts.

But do they really need a lot of new stores anyway? The retailer is, after all, on track to have 1,000 US stores by the end of its fiscal year in February. That’s gotta hit most of our population, right?