Best Buy CEO has stern warning for customers | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Many nostalgic retailers that were popular in the early 2000s, such as Blockbuster, Circuit City, and Kmart, have either significantly shrunk their retail footprint across the country or completely gone out of business amid the rise of online shopping and the evolution of digital entertainment.

However, iconic electronics retailer Best Buy, which first opened in the ‘60s, still stands.

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In Best Buy’s fourth-quarter earnings report for 2024, the electronics retailer revealed that it faced a 0.2% year-over-year increase in U.S. comparable sales during the 2024 holiday season after previously suffering 12 consecutive quarters of declining sales.

Despite a slight increase in consumer momentum, Best Buy’s operating income, which is a company’s profit after expenses, declined by about 61% year over year during the fourth quarter.

During an earnings call on March 4, Best Buy CEO Corie Barry said the company saw a “strong customer response” to its Doorbuster deals and Black Friday sales during the holiday season.

“As we have seen for the past several quarters, customers were deal-focused and attracted to more predictable sales moments,” said Barry during the call.

Best Buy CEO has harsh news for customers

However, Best Buy predicts that sales will either remain flat or increase by a small 2% year over year in 2025 as consumers continue to tighten their spending.

“We believe the consumer will remain resilient but is still dealing with high inflation that is driving expenses up across their lives, making them value-focused and thoughtful about big-ticket purchases,” said Barry. “We also still see a consumer that is willing to spend on high price point products when they need to or when there is technology innovation.”

A shopper with a Sony Playstation 5 at a Best Buy store on Black Friday in San Francisco, California, US, on Friday, Nov. 25, 2022.

Bloomberg/Getty Images

He also warned during the call that customers should soon expect higher prices at Best Buy stores due to President Donald Trump doubling his previous 10% tariff on all goods imported from China to 20% on March 4. Trump also imposed 25% tariffs on all goods from Mexico and Canada.

Tariffs are taxes companies pay to import goods from overseas, and the extra cost is often passed down to consumers. Barry claims that these tariffs will probably have a “negative impact” on Best Buy’s comparable sales.

“International trade is critically important to our business and industry,” said Barry. “The consumer electronics supply chain is highly global, technical, and complex. China and Mexico remain the number one and number two sources for products we sell, respectively. While Best Buy only directly imports 2% to 3% of our overall assortment, we expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely.”

Best Buy CEO unveils how the price increases will take place

Barry claims that consumers will not see price increases overnight but will likely see them within the next few months.

“You’re not overnight going to see these implications, and that’s why even when we talked about the impact, we said it would be much more in quarters two through four, because depending on how fast any category turns, these cost increases will slowly work their way into categories, and then will also slowly work their way into price,” said Barry.

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He also doubled down on Best Buy’s goal to have “competitive” pricing despite the threat of tariffs.

“I think our objective in terms of pricing will be the same as it has always been,” said Barry. “We want to be competitive. We want to make sure that we have price points across the spectrum for everyone from value-seeking to high-end premium-seeking.”

As Best Buy braces for the impact of tariffs, the electronics retailer plans to continue closing stores in the U.S. this year after closing 12 last year.

“We will continue our disciplined annual approach to closing or relocating less profitable locations,” said Barry. “Last year in the U.S., we closed 12 traditional big box stores and opened two new stores. This year, we expect to close roughly five to 10 stores and open a few new smaller format stores.”