As coronavirus pandemic has changed the way people used to shop, more and more companies are shifting focus to online retail. Best Buy is also concentrating on the online store as it continues to struggle with the low sales on its stores. The company is also reducing the workforce to make up for losses. It has so far laid off around 21,000 workers over the last year. Most of them were furloughed during the COVID-19 pandemic. However, the company said that it trimmed its headcount by 5,000 recently. Best Buy said that it will replace these workers with 2,000 part-time workers.
The company started closing its stores last year during the pandemic and furloughed workers. At present, the company is working with around 102,000 workers, almost 17 percent less than what it had a year before. The year 2020 has been a tough one for many businesses. While some adjusted losses by trimming the workforce, others had no option but to shut down the business. Recently, electronic giant Fry’s announced permanent closures of all its stores. But Best Buy seems to be in a little more comfortable position and has weathered the COVID-19 pandemic fairly well. The main reason is that its online sale has registered impressive growth. Reports suggest that online sales were up by around 89 percent.
In the fourth quarter that ended on January 31, the online sales of Best Buy accounted for 43 percent of the total sales of the company. This was up by around 25 percent when compared to 2019. Best Buy believes that this shift in shopping trends is almost permanent. And this is why it is reducing its physical retail presence and trying to adjust to the new market reality. The company said that traditional physical stores have become less relevant and this is why it has been closing around 20 stores every year for the last two years. The company is expected to accelerate the process in the coming days. Out of 1,000 stores of the company, leases of around 450 stores are about to expire in the next three years. The company said that renewing a lease always requires rigorous evaluation but it will have a higher threshold in the future.