Two pieces of data we just got paint a very grim picture for the traditional electronics industry.
First, Best Buy reported really miserable Q3 earnings. The company said it was getting killed on marketshare, which would imply that retailers like Wal-Mart and Amazon are eating its lunch.
But it’s not just about competition. We just got retail sales for November, and electronics stuck out like a soar thumb as a weak spot in otherwise blisteringly strong report.
Some context: Electronics sales in November were were up 0.9% from November of last year, while total retail sales were up 7.7% from last year. Digging deeper we see other consumer categories doing much better: Sporting goods were up 12.3% form last year. Clothing was up 7.5%. Food and beverage sales were up 3.2%.
And it’s not hard to reconcile this with the boom in tech and gadgets. Popular products from the likes of Netflix, Apple, and others all have the effect of reducing the need for more expensive TVs, Blu-Ray players, etc.
A company like Best Buy is a weak player in an industry that’s clearly in a rut.
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