It’s no secret that Best Buy is struggling. The company’s share price is down 30% over the past five years, and its debt has been downgraded to junk status by Moody’s.
Best Buy’s problems are well-documented, and there’s no easy fix in sight. The company is caught in a perfect storm of secular decline and self-inflicted wounds.
Best Buy’s core problem is that it sells products that are increasingly becoming commodities. More and more consumers are comfortable buying electronics online, and there is very little that Best Buy can do to differentiate itself from the competition. This commoditization has put enormous pressure on Best Buy’s margins, and the company has responded by cutting costs and closing stores.
Best Buy is also facing headwinds from major retailers like Amazon and Walmart, who are increasingly competing in the electronics space. These retailers have deep pockets and can use their scale to undercut Best Buy on price. Amazon, in particular, is a major threat to Best Buy, as its Prime shipping program makes it easy for consumers to buy electronics with just a few clicks.
Best Buy has responded to these challenges by investing in its online presence and trying to become more of a destination for tech enthusiasts. The company has also made a number of smart acquisitions, such as GreatCall, which provides connected health services for seniors.
Despite these efforts, Best Buy remains in a tough spot. The company’s share price reflects the market’s doubts about its future, and it will take a Herculean effort to turn things around. If Best Buy can’t find a way to grow its top line and improve its margins, it may not be long for this world.
Is Best Buy going out of business 2020?
It’s difficult to say definitively whether or not Best Buy will be going out of business in 2020. The company is facing significant challenges, but it has also taken some steps to try to address them. Only time will tell if these efforts will be successful.
