Best Buy profit hit by growing online retailers

ELECTRICALS retailer Best Buy’s second-quarter profit plummeted by 30 per cent as consumer spending continues to be squeezed and online competitors gain momentum.

The company said sales were almost flat despite a string of promotions.

For the quarter to 27 August, Best Buy reported a profit of $177m (£111.5m), down from $254m in the same period last year. Revenue was up by 0.01 per cent to $11.35bn.

Weakness in television and gaming sales offset strength in tablets, appliances and e-readers. Best Buy faces strong price competition from rivals such as Amazon.

Chief executive Brian Dunn said the results “reflect continued macro challenges to overall consumer spending and lower consumer electronics industry sales”.

At US stores open at least a year, sales fell in television, gaming, photography and mobile phones.

Best Buy’s own online sales grew 13 per cent in the US. Gross margin fell to 25.3 per cent from 25.7 per cent as the retailer reduced prices to stimulate sales.

Last month the company launched an e-commerce service to allow customers to place orders through smartphones.