Best Buy smaller stores target markets beyond its traditional footprint
Incoming CEO Jason Bonfig says smaller Best Buy stores can reach markets that cannot support a traditional-size location.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Best Buy smaller stores are part of incoming Chief Executive Jason Bonfig’s plan to extend the retailer’s reach into markets that cannot support a traditional-size location. Bonfig told CNBC that the format is meant to add locations alongside the chain’s existing stores, while Best Buy works to improve its customer experience and pursue other growth efforts.
The approach is based on matching the store to its market rather than applying one standard footprint. Bonfig is due to succeed Corie Barry as CEO on Nov. 1, according to the Minnesota Star Tribune.
How large are Best Buy’s smaller stores?
CNBC reported that Best Buy’s planned small-format locations generally run from 12,000 to 15,000 square feet. Medium-format stores are about 20,000 to 25,000 square feet, while some of the retailer’s largest stores, including its New York flagship, are larger than 40,000 square feet.
The company’s recent openings show that the strategy is not confined to a single size. Best Buy opened a store in Jonesboro, Arkansas, that Bonfig described as 18,000 square feet, and another in Cape Cod, Massachusetts, at 28,000 square feet, CNBC reported. He said the Cape Cod location was slightly bigger than the company’s typical medium-size store.
Jonesboro marked Best Buy’s return to the city after a tornado destroyed its previous location. Bonfig said the market could not support a 30,000- or 35,000-square-foot store, but that the new location could carry the company’s main product categories.
Why does Best Buy want smaller stores?
Bonfig said smaller stores can put Best Buy in areas that make sense for the brand but cannot support a conventional store. He also said Best Buy has found that opening closer to customers can lead to more first-time store visits and greater use of its app and other digital channels. That is Best Buy’s stated customer-behavior finding, rather than an independently established outcome.
He described the new formats as an addition to the chain’s usual stores, not a replacement for them. Best Buy Canada has operated smaller formats for an extended period and has had locations as small as 7,000 square feet, Bonfig told CNBC.
What else is in Bonfig’s strategy?
The store plan comes as Best Buy seeks to recover from a post-pandemic sales slowdown and confronts competition in consumer electronics. Bonfig has identified expanding reach, improving the customer experience, strengthening Best Buy’s retail and technology role, and maintaining a human-focused company as priorities, CNBC reported.
He has also discussed building advertising, marketplace and technology businesses beyond store sales. The Minnesota Star Tribune reported that Best Buy Marketplace lets third-party sellers offer goods on the company’s website, while Best Buy Ads is its advertising business.
Separately, Best Buy has been repurposing unused space in 70 existing stores, according to Retail Dive. Fifty are set to receive Meta experiences, and 20 are planned for outdoor assortments led by the company’s Yardbird subsidiary. Those changes concern existing locations and are distinct from the new-store format strategy.
In its first fiscal quarter, Best Buy reported enterprise revenue of $8.9 billion, up 2%, comparable-sales growth of 2%, and net earnings of $276 million, Retail Dive reported in May. Those results preceded the August discussion of store formats and do not establish an effect from the smaller-store plan.
This story draws on original reporting from CNBC.