Question: Best Buy-Increasing Sales Results A sluggish economy had caused consumer spending to drop, especially in the sales of desktop computers and CDs. Growth in comparable store sales- the sales at stores open for more than a year-were disappointing. This was not the ideal time to assume leadership of a leading specialty retailer of consumer electronics, personal computers, entertainment software, and appliances. But that is exactly what faced Bradbury H. Anderson as he became the new chief executive officer of Best Buy. So how did Best Buy overcome this challenge? It went digital. Recognizing changes in consumer preferences, Best Buy increased its assortment of digital cameras and digital, LCD, and projection TVs. Mr. Anderson and his new management team undertook other strategic plans to reduce product costs and store expenses. These changes enabled Best Buy to achieve a 2.5% increase in comparable store sales, a 13% increase in total revenue, and an 8% increase in net income.
Critical Thinking
1. How can a company have a 13% increase in total revenue with just a 2.5% increase in comparable store sales?
2. For any local company, such as a fast-food restaurant, suggest changes in the products they offer that you believe could increase sales.