With electronics prices down and a potentially weak holiday season, Best Buy predicts poor sales for 2023. Could sales pick up in 2024?
Best Buy has lowered its annual sales expectations for 2023 based on potentially low consumer demand for the holiday season.
The retailer was already predicting a decline for the fiscal year. Best Buy previously estimated a decline of 4.5% to 6%, and they have now increased that decline to 6% to 7.5%.
However, Best Buy is not alone in thinking 2023’s holiday season might disappoint (though plenty of retailers expect the exact opposite; it might be the biggest one yet).
Best Buy’s primary category is electronics, which has been struggling for a while now. Market experts have suggested that demand for electronics spiked over the pandemic and then declined for the last two years, harming businesses that focus primarily on electronics.
Long story short, consumers purchased the bulk of their electronic products during the pandemic, which they might have purchased over the last two years, reducing demand.
And that lack of demand has harmed electronic product prices. According to Adobe’s Digital Price Index, electronic prices are down 11.92% year-on-year at the time of writing—the most significant decline in any product category.
However, it’s not all bad news. Best Buy is positive 2024 will be a different story, believing that demand for electronics will pick up next year.
Statista expects the global consumer electronics market to grow 1.3% in 2024. Meanwhile, in the US, the consumer electronics market is expected to grow 0.8% in 2024 and “grow annually by 1.17% (CAGR 2023-2028).”
Elsewhere, The NPD Group predicted at the beginning of 2023 that demand for electronics will “remain flat in 2024” and that “Tech sales are expected to return to growth in 2025, rising by 2%,” so Best Buy and other electronics retailers may have another challenging year ahead before experiencing any real growth.
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