Best Buy Plans to Boost Holiday Hiring
Dunn said the increased hiring is due in part to demand for new flat-screen televisions, smartphones, and netbooks. Best Buy's sales of flat-screen TVs in July actually exceeded those of last December, Dunn said, surprising executives of the suburban Minneapolis-based chain. In an 8-K filing with regulators on Oct. 2, the company said Dunn "misspoke" about flat-screen TV sales and meant to say that sales on certain weeks were higher in July than in certain weeks of the holiday selling period.
Overall comparable-store sales for the quarter ending Aug. 29 declined 3.9%, however, and net earnings dropped 22%.
Analysts are expecting another dour holiday for retailers, with projections from both TNS Retail Forward and Deloitte calling for flat sales. On the bright side, an index by the Consumer Electronics Assn. and technology review site CNET (CBS) that measures consumer intent to make electronics purchases climbed in August for the fourth time in the past five months. Earlier this month, Best Buy raised its revenue forecast for the year to $48 billion to $49 billion, up slightly from its outlook in March.
"Consumers are back out spending again," Dunn said. "But there's a new normal—they want value across all price points."
At Most Retailers, Fewer Seasonal Jobs Best Buy's decision to boost holiday hiring puts it in the minority among big retailers. Nearly half of those polled earlier this month by consultancy Hay Group said they will hire 5% to 25% fewer seasonal workers compared with last year. Still, Best Buy isn't the only retailer boosting seasonal hires. Rival electronics chain hhgregg (HGG) of Indianapolis, which has 118 stores in nine states, will hire 800 seasonal staff this year, up 10% vs. 2008, according to CEO Dennis L. May.
Dunn also said that Best Buy has done a good job of capitalizing on the demise of Circuit City, the former No. 2 chain that went bankrupt in November 2008 and was liquidated earlier this year. "Circuit City's exit put some customers in play, and we have gained more market share than anyone," Dunn said. But that's not too surprising, given that Best Buy, with more than 1,000 U.S. stores, always had the most to gain if Circuit City disappeared.
Best Buy has taken over 20 former Circuit City locations, Dunn said, out of a possible 30 it coveted. One of the 20, in Manhattan's Union Square, still sports a Circuit City sign, however. "I want that pulled down," Dunn quipped. "I'm paying for it."
Layaway Test Hhgregg is also courting former Circuit City customers, and early next year will expand into Circuit City's former stomping grounds in Washington, D.C.; Baltimore; and Philadelphia. Wal-Mart Stores (WMT), the second largest consumer electronics retailer, has recently redesigned its electronics department aiming to grab market share.
Dunn also said Best Buy is testing a layaway program in some Michigan stores. Layaway, which fell out of favor with many retailers over the years (Wal-mart stopped offering it in 2006), has enjoyed a renaissance of late, and Kmart, part of Sears Holdings (SHLD), will soon air commercials touting its holiday layaway program.