Fears of weak consumer spending in the current U.S. economic downturn are being borne out, at least for Best Buy. The entertainment tech retailer, which sells a large selection of video games, says that consumer spending has fallen -- taking its revenues down with it.
"Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," says vice chairman and CEO Brad Anderson in an official statement.
"Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year."
Store sales are down 7.6 percent for October, an increased slip over September's small decline. The company lowered its financial guidance for the fiscal year, saying it was unable to project how the holiday shopping season would pan out.
And Best Buy expects the decline could continue, expecting 5 to 15 percent decreases in comparable store sales for the four months left in its fiscal year ending February 2009, which would spell a 1 to 8 percent decline overall. No specific breakouts for game-related revenue changes were available.
"In 42 years of retailing, we've never seen such difficult times for the consumer," says president and CEO Brian Dunn. "People are making dramatic changes in how much they spend, and we're not immune from those forces."