Best Buy Announces Expansion Plans
Best Buy has plans for expanding its stores by 20% with new stand-alone “Geek Squad” stores and open lab stores in China.
According to a press release, the company now plans to operate at least 1,200 superstores in North America, up from its prior growth plan of 1,000 superstores, affording the company more than two years of additional organic growth from new store openings. This new total assumes approximately 200 Canadian superstores (including both Future Shop and Best Buy stores) and approximately 1,000 U.S. Best Buy superstores. Best Buy currently operates 838 stores in North America and typically opens 75 new stores per year in that footprint.
The company has reduced the cost of building new stores by nearly 10% over the past year.
Best Buy plans to open 20 to 50 stand-alone Geek Squad stores in urban areas over the next 12 to 18 months.
“Expanding and enhancing our services offering is one of our top goals for the company,” said Brad Anderson, vice chairman and CEO of Best Buy. “We know that more consumers are storing their photos, music, home videos and games on their computers. As their computer-based content becomes more important to them, so do the services that help them enjoy and protect that content. Moreover, we would like to claim for Geek Squad a position as the premier, national computer service provider, and we will be increasing our advertising of the brand this year. So far, the customer response has been terrific, and customer loyalty to Geek Squad is high.”
Best Buy said that it views China as a very attractive retail market. According to Al Lenzmeier who is leading the company’s international expansion, local leaders who have strong customer insights will be hired to manage the lab stores. The lab stores will be opened and operated as a way to accelerate learning about the diverse consumers in China. Consumer electronics and appliances sales in China are projected to grow by the strong double digits for the foreseeable future.