Strong sales of video games, TVs and Apple products, particularly during Thanksgiving weekend and late December, helped make Best Buy "the holiday winner," retail analyst David Strasser reported.
Strasser, who covers hardline retail for Janney, Montgomery, Scott, estimated that Best Buy's November-December comp sales rose about 2 percent in the U.S. on top of flat prior-year performance, driven by aggressive promotions.
In a research note, he credited a leaner operating and decision-making model — achieved by removing several managerial layers — for the ability to rapidly adjust promotions. This allowed Best Buy to effectively compete with Walmart and other retailers on key holiday products like iPads, iPhones and TVs, he said.
The No. 1 CE chain also effectively leveraged its 40-million-plus loyalty club members with private sales events, he noted.
All told, CE was one of the holiday's strongest performers amid generally lackluster results, Strasser said, although margins were questionable due to the "very promotional season."
Indeed, he described Walmart's one-hour in-stock guarantee on select Thanksgiving doorbusters as "the biggest step-up in promotions we have seen since the mid '90s." The sales event drove traffic, he said but likely only modest profitability.
