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Best Buy spends large and employs less

Posted 10-04-2011 at 12:28 AM by TiffanyL

Best Buy, the largest consumer electronics merchant on the planet, is combating income losses by increasing its online presence for the holiday season. The electronics giant also intends to reduce short-term employing by half. The employing reduce is a large letdown for the unemployed, eager for holiday work. Meanwhile, the merchant is spending unprecedented quantity on its lobbying initiatives. Article source: Best Buy spends more and hires fewer as the holiday season approaches

Attempting to use the internet

In order to combat its fifth straight quarterly drop, The Richfield, Minn.-based retailer is stepping up efforts to lure buyers by bolstering its online existence.

“We’re moving our messaging to (the Internet), where we know our consumers are,” said company CEO Brian Dunn. “The consumer is going to make careful, thoughtful, measured choices around Christmas and the holidays.”

The holiday buying season is where 40 percent of retail sales generally come from. About 70 percent of the United States economy is dependent on consumer spending.

Tablet computers and smartphones

Dunn predicted that tablet computers and smartphones will be the big sellers this season, so efforts are being made to push that inventory with increased online advertising. Sales that typically go to other retailers may go to Best Buy this year.

“You’re going to see robust growth in tablets and mobile phones, but the problem for Best Buy is they under-index in those two categories,” said analyst Peter Keith. Personal electronic devices will really be pushed. About 40 percent of Best Buy’s sales are of computers and televisions, which the business intends to change this year.

Employing decreased

This year, only about 15,000 jobs will be available for the holiday seasonal jobs. That is a large decrease from last year’s 29,000. In the current economy, that is bad news, specifically for those who are unemployed and hoping for seasonal employment.

A Hay Group survey showed that fewer individuals will be hired this year compared to last year’s seasonal help. This is the plan for about a fourth of the company interviewed.

Keeping its priorities straight

The merchant is trying very hard to cover losses. Still, it is spending a ton of money on lobbying.

Reuters explained that Best Buy is spending a ton of money on lobbying. This includes the $530,000 spend in just the second quarter of the year. Compared to the first quarter, it is an 8 percent increase. Compared to the second quarter of last year, that is an 83 percent increase.

Problems lobbied by the store consist of electronics recycling, debit card fees, telecom standards, the Dodd-Frank Wall Street Reform Act, online sales tax, telecom standards, Medicare, and the Data Security and Breach Notification Act.

Citations

http://www.businessweek.com/ap/finan.../D9Q1KLJG0.htm

http://www.reuters.com/article/2011/...78Q6ZV20110927

http://www.bloomberg.com/news/2011-0...-ceo-says.html
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