Dive Brief:

• Best Buy Co. Thursday said strong demand for low prices and soft demand for electronics would hit its sales in the first half of the year, sending them flat or even negative.
• In sharp contrast to last year, the electronics retailer had a nice holiday season, with domestic sales increasing 4.1%, same-store sales increasing 3.4%, and online sales soaring 13.4%.
• But the outlook looks bleaker because pressure to keep prices low continues, and because sales won’t be as brisk as at the holidays and its sales of extended warranties has fallen, the retailer said.

Dive Insight:

Best Buy’s warnings sent the prices of its shares slumping Thursday, as investors worried about the long term. Best Buy has been working hard to turn things around, improving its store experience, greatly boosting its e-commerce, and streamlining its fulfillment system.

But price pressures are staying intense and people aren’t buying that many electronics. And, unlike Wal-Mart Stores or Target, the retailer doesn’t have other product categories to see it through that soft demand.