Retail

Best Buy Plans First Store Opening In Seven Years

Best Buy

Marking its first big-box store opening in seven years, Best Buy is opening a 36,000-square-foot store in a suburb of Salt Lake City. The store is located in a mixed-use development called Station Park and is scheduled to open in the fall, the StarTribune reported.

“We’re excited to be opening a brand-new store in a popular shopping center in a growing part of the Salt Lake City market,” Jeff Shelman, a Best Buy spokesman, told the StarTribune. Shelman declined to tell the newspaper if Best Buy has any more stores in development.

The opening comes after Best Buy has been closing around a dozen stores each year. In 2017, for example, the retailer closed 18 stores and 11 stores in 2016. But Best Buy did open seven new stores in 2011. Since then, it has only opened a few stores in Mexico and Canada. Today, Best Buy has just over 1,000 stores in the U.S.

The news comes as Best Buy plans to shutter its 250 mobile-phone stores in the U.S. by May. The stores are not as lucrative as they once were since the smartphone market’s maturation, The Wall Street Journal reported.

Hubert Joly, Best Buy chief executive officer, wrote, “We began to open them more than a decade ago, before the iPhone was even launched. Fast forward to 2018 and the mobile-phone business has matured, margins have compressed and the cost of operations in our mobile stand-alone stores is higher than in our big-box stores.”

In contrast to the costs associated with running such stores, mobile stores only bring in a little more than 1 percent of the retailer’s revenue. Each averages 1,400 square feet, while standard Best Buy locations tend toward 40,000 square feet. The mobile stores were facing competition from wireless carriers, which sell smartphones as well. Apple also sells phones directly to consumers, as do Amazon and other eCommerce retailers.

——————————–

Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the December 2019 Mobile Card App Adoption Study, PYMNTS surveyed 2,000 U.S. consumers for a reveal of the four most compelling features apps must have to engage users and drive greater adoption.

TRENDING RIGHT NOW