I remember visiting Best Buy at the launch of its first UK store.
There was an excited buzz about the place. This was a retailer that was to open ‘spectacular’ stores the likes of which us Brits have never seen. It would ‘revolutionise’ the way we bought tech, service us better than anyone else, oh and kick that rubbish Dixons out of the market, too.
One year on and Best Buy UK has just a handful of shops. It is expected to report a loss of around £55m for its financial year and its senior management team is jumping ship.
It all suggests that the US ‘big box’ retail giant has found cracking the UK harder than it expected.
The problem Best Buy faced was announcing its UK plans in May 2008 and then taking two years to turn up.
The retailer partnered with Carphone Warehouse because it had spotted a gap in the UK market for an affordable, service-based technology retailer.
Yet by the time they actually opened a shop, Dixons – who were never that rubbish in the first place – had launched new, shinier, service-based megastores. And not only were these shops good but they could be found next to future Best Buy sites. That gap in the market had suddenly vanished.
“It’s pretty hopeless,” said Arden Partners’ retail analyst Nick Bubb. “Best Buy stores do a good job on mobile phones and PCs, which is what you'd expect from the Carphone connection.
“But otherwise they're nothing special. On the whole I think the Currys Megastores do a better job and of course Dixons made it difficult for Best Buy by deliberately upgrading their nearby stores in Lakeside, Southampton, Croydon and so on before Best Buy opened.”
Best Buy has since admitted it is ‘not satisfied’ by its UK performance.
Not only did it underestimate its rivals, the company entered the market at a really low period for UK retail. It’s been tough, and last month chief executive Scott Wheway, marketing director Kevin Styles and commercial director Harry Parmar all stepped down.
So is that it? Less than a year in and is Best Buy just giving up?
I wouldn’t bet on it.
Best Buy isn’t the first US giant to try and crack the UK. When Wal-Mart made its surprise swoop for Asda back in 1999, the firm had equally ambitious plans.
But it wasn’t easy, Tesco proved a formidable opponent, and after a bit of restructuring Asda settled in as UK’s No.2 supermarket.
So could we see a similar thing happen with Best Buy?
The firm may not have revolutionised retail like its early rhetoric suggested it would, but there are things its rivals can learn from its stores – especially when it comes to letting customers play with the latest products.
And the company’s execs are still making the right noises on following through with its ‘bold’ plan to open 80 stores in the UK.
A bit more investment with a new management team and maybe Best Buy will be able to banish the memory of its tough first year in the UK.
If there’s one thing to take from the whole saga, it’s that even if you are a US multi-billion dollar super retailer, you can’t just waltz into the UK and expect success to follow.
It’s just not that easy.