Dive Brief:
- Best Buy Canada recently opened its first small-format store in British Columbia in a partnership with Bell Canada, the companies said in a June 26 announcement. The companies plan to open 167 Best Buy Express-branded stores by the end of this year. Many are expected to open in communities that did not previously have a Best Buy.
- The express-format stores will offer a curated consumer tech assortment, Geek Squad services and telecom services from Bell, Virgin Plus and Lucky Mobile. The new stores will also offer buy online, pick up in-store services for 100,000 products available through Best Buy’s fulfillment network.
- “Opening 167 stores in five months may be a North American first,” Ron Wilson, president of Best Buy Canada, said in a statement. “It’s certainly bold in retail today. We’re excited to see these new stores come to life as we double our store count, expanding our presence across Canada.”
Dive Insight:
Best Buy first announced the partnership with Bell Canada in January. Best Buy Canada is a wholly-owned subsidiary of Minnesota-based Best Buy and opening the smaller stores is one of the company’s priorities for the fiscal year, CEO Corie Barry said during a February earnings call.
“After months of planning and preparation, everyone here at Bell is thrilled to see the first Best Buy Express open its doors,” Blaik Kirby, Bell’s group president for consumer and small business, said in a statement. “It’s a huge milestone in our partnership with Best Buy, and it’s just the beginning with more stores coming soon. We’ve combined the best of both companies to create a one-stop shop for Canadians and all their tech and connectivity needs.”
The Canadian retail stores were previously known as The Source. They were a wholly owned subsidiary of Bell Canada. For the new stores, Barry said in February that Best Buy will provide the consumer electronics assortment, supply chain, marketing and e-commerce services.
Bell, which says it is Canada’s largest communications company, will be responsible for store operating and labor costs under the partnership, and it will also be the exclusive provider of telecom services. “This collaboration will allow us to expand our presence in malls and in smaller and mid-size communities across Canada,” Barry said according to an earnings call transcript.
Best Buy’s revenue fell 6.5% to $8.8 billion in the first quarter. Barry cited high inflation and mortgage rates, as factors that contributed to the company’s soft performance, along with lower consumer demand for tech purchases. The company also closed some stores last year, laid off an undisclosed number of people in Q4, and said it plans to close additional stores this year.
Despite company and industrywide challenges, analysts with Telsey Advisory Group, led by Joe Feldman, shared an optimistic outlook about the retailer’s future following a recent in-person visit to a Best Buy store in New Jersey ahead of the July 4 holiday weekend.
Among the positives the analysts noted were the store’s promotion of My Best Buy, its customer-focused membership program, which was revamped last year. The store had also removed some fixtures, which minimized empty space on the sales floor, the analysts said.
“Overall, we believe Best Buy has a sound strategy, strong management team, and is ahead of many retailers in its omnichannel capabilities, optimization of real estate, and new revenue streams, like membership and health,” Telsey’s analysts said. “This strategy, together with strong execution, positions the company well once the industry stabilizes and returns to growth.”
