Best Buy slams brakes on UK stores amid spending freeze
Strategy to build 80 UK stores to be shelved
A slowdown in consumer spending looks set to derail Best Buy's expansion plans in the UK with the launch of 80 new megastores to be put on the back burner.
The US retailer opened the doors to its first UK flagship store in Essex towards the end of April 2010 and has since cut the ribbon on another nine including branches in Croydon, Bristol and just this month in Rotherham.
But the perilous state of the economy - the Bank of England says recovery in consumer spending is forecast to be the slowest since 1830 - is forcing a re-think of the initial store roadmap to 2013, according to The Sunday Times.
Another three stores are in the offing but management concede the blueprint of launching 80 UK mega-shops is now unrealistic in the current environment and are working on a scaled down strategy including the creation of smaller outlets, the report says.
Best Buy invested £1.1bn in Carphone Warehouse in 2008 as a beach head for Europe but has also set up more than 1,000 Best Buy Mobile concessions in its homeland and expects to have 400 standalone mobile stores this year.
Establishing own-branded outlets in the UK and Europe has proved more arduous, not helped by the departures of several execs including Paul Antoniadis, SVP of international operations and Scott Wheway, chief executive at Best Buy Europe.
Sluggish retail demand, which first emerged in the second half of 2010 has knocked the confidence of the majors with Dixons Retail previously warning of a challenging year ahead, and Argos last week issuing a profit warning.
Best Buy refused to comment but will file first quarter numbers tomorrow which should provide more details on the market and its plans. ®