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Circuit City Gives Up

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Good for Best Buy... Or is it?

by Crunchy Frog    Jan 16, 2009, 2:41 PM

The last 5 to 10 years has seen many large chains dry up around the country. Circuit City is just the latest in a long sad story of a changing world and most likely, they were mismanaged to some degree.

The over-head on these stores is so immense that they just can't compete with places like Fry's Electronics or online retailers of any kind. Circuit City never really had good prices or memorable service and quite frankly, I almost never shopped there. Last year just before CompUSA closed, an employee told me that their monthly rent was $60K alone. I'm sure the operating costs would double that number easily per month which is a staggering number.

Best Buy stands to benefit from these closures in the short term, but they also have huge over-head for their stores and let's face it, their prices stink! Last week I went to Best Buy for a USB thumb drive. A 16GB Sandisk drive was $79 which I found at Staples for $44 on sale and even found it cheaper on eBay for $20 with free shipping. Best Buy loses my business more often than not these days. Consumers simply have lots of options where they can buy items these days and in a tough economy, they just will not pay double for the convenience of a huge store with lots of flash.

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