Sometimes the media will take a little bit of news and carry it too far. CNN Money recently speculated that because Wal-Mart had good sales in consumer electronics during the four weeks ending July 7 that Best Buy (BBY) and Circuit City (CC) better watch out.
It does appear that Wal-Mart did well in the TV and PC segment and that it sold more than its fair share of Dell (DELL) computers. Looking at the results, CNN Money put it this way: Given its reputation as a "category killer," could Wal-Mart’s ambition of becoming a major player in consumer electronics become the kiss of death for industry leaders Best Buy and Circuit City?
Most Wal-Mart buyers are not affluent. It is one of the reasons that its "non-bank banks" which offer services to people who do not have their own checking or savings do so well. It is the reason that the retailer sells inexpensive clothing. A walk through a Wal-Mart would tell most observers that the chain is not likely to be a big outlet for iPhones and 100-inch plasma TVs.
Best Buy has nothing to fear.
Douglas A. McIntyre
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