Best Buy Says Strapped Consumers Cut Back on Home Theater, Computer Purchases

Best Buy saw a decline in sales during the second quarter, the electronics retailer reported Tuesday (Aug. 30), as consumers shied away from home theater and computer purchases.

“We are clearly operating in an uneven sales environment,” CEO Corie Barry said in a news release. “As we entered the year, we expected the consumer electronics industry to be softer than last year following two years of elevated growth driven by unusually strong demand for technology products and services and fueled partly by stimulus dollars.”

The news comes at a time when inflation is continuing to squeeze Americans across all income categories. PYMNTS found in “New Reality Check: The Paycheck-to-Paycheck Report” that 36% of consumers who make $200,000 a year or more were living paycheck to paycheck.

Barry pointed to several factors challenging “the macro environment” and putting added pressure on Best Buy’s industry.

However, she noted during a conference call with investors Tuesday that back-to-school season was better this year as students returned to campus, improving month by month through the quarter before weakening again by about 10% this month.

“In terms of implications for the holiday, I think it’s less about what does back to school portend; I think it’s more about broadly what we’re seeing,” Barry said on the call. “We’re seeing a customer who’s more value-oriented, who is definitely moving more toward some of those sales events, and so I think our hypothesis is that you’re going to see a holiday that starts to look a little bit more like what we saw pre-pandemic. Maybe it comes a little bit later and is probably promotional in our space.”

The company’s quarterly earnings also showed that revenues from Best Buy’s services programs remained flat year over year, coming in at 5%. Last year, Best Buy launched its membership program, Best Buy Beta, which offers benefits that include free installation and unlimited technical support.

Read more: Best Buy Debuts Membership Program With Free Installation Perks

Last month, Best Buy released a business update showing its second-quarter results would be below the expectations it shared in May, due to softening demand for consumer electronics amid high inflation and declining consumer sentiment.

See more: Retail Forecast Cuts Mount as Consumer Worries About Inflation, Recession Intensify

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.