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Thursday, March 29, 2012

UPDATE: Never anger a reporter. (And we’re all reporters.)

Observation:   Here in the Twin Cities, one of the biggest business news stories of the day is the announcement that Best Buy is closing fifty stores and cutting jobs at its corporate headquarters (see the Star Tribune story by clicking here).

The coverage inspired me to review some of the material I’ve posted about the retailer, including a post about a nasty review in Forbes (see “Never anger a reporter,” 1/5/12).  But when looking for that original Forbes story, I stumbled across a follow-up that I had not seen until now, published by Forbes on January 9 (see “The People vs Best Buy, round two” by clicking here). 

Implications:  Let me start by saying that my heart goes out to anyone who is losing a job in this restructuring… may you swiftly find a new, fulfilling place to apply your trade and prosper.  Nobody likes to see job loss.

But there are two reasons I revisited this story and feature it again here.  First, in reading the follow-up story in Forbes—“The People vs Best Buy, round 2”—one discovers just how powerful the fallout can be from negative publicity.  In the digital age, consumers have infinite ways to pile on, and add their own two-cents about a shopping experience.  The original Forbes article was forwarded via email, LinkedIn and other means with stunning frequency.  That speaks to the viral nature of the consumer community.

Secondly, the Star Tribune story explains that Best Buy lost $1.7 billion in their fourth quarter, compared to a profit of $651 million for the same period in the prior year.  In other words, the further we moved away from the recession, the worse things got for Best Buy’s bottom line.   That issue dramatizes just how selective an economic downturn or upswing can be:  Like the recession, the ongoing economic recovery will not be an equal-opportunity event.

How is your recovery progressing?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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