Best Buy is looking to reduce its 42 million square foot big box footprint by 10% over the next three to five years due to weak sales caused by stretched consumers and competition from discounters and internet rivals. According to the National Real Estate Investor, the consolidation could save the company $70 to $80 million a year. The retailer is also considering subleasing space in existing stores as one way to achieve the reduction.
Sales and earnings for the electronic retail giant were relatively flat in the first quarter of 2011 compared with the first quarter of 2010. Comparable store sales dropped 1.7% in the first fiscal quarter on a year-over-year basis after growing 2.8% during the same period last year. Ever-present economic hardships such as falling home values and rising gas and food prices is accelerating the online buying trend, the largest threat to sales for the brick and mortar segment of the retailer.
To read the full article from the National Real Estate Investor, click here.