Best Buy’s suppliers are deepening their investments in the retailer’s stores, prices and operations as it navigates a choppy market for electronics, with layoffs and store closures ahead.
The company logged about $20 million of vendor funding that offset some of Best Buy’s selling, general and administrative expenses in the fourth quarter, CFO Matt Bilunas said on the company’s earnings call last week. Best Buy expects $20 million a quarter in similar funding in the first half of its current fiscal year.
Those figures can include spending from suppliers on price discounts, specialized labor, store experiences, spending on advertising with Best Buy and the retailer’s fulfillment services, executives have explained in the past.
On the Q4 call, CEO Corie Barry highlighted vendor spending on advertising with the retailer — a fast-growing business for Best Buy — as well as suppliers’ partnership with the retailer on merchandising experiences in its stores, calling out specific team-ups with Tesla, Lovesac, and Starlink.
Among the vendor investments in Best Buy stores are in merchandising end caps, which Barry described as “super important positions in the store because they tend to be the most customer-facing.”
“And so you're going to see us continue to bring those to life,” she added.
Best Buy also added vendors to its Supply Chain Partner+ program in Q4, Barry also noted.
Describing the program in a May call last year, the chief executive noted that it leverages the retailer’s supply chain and fulfillment capabilities. Some suppliers give their online customers the option of picking up purchases at Best Buy stores. Barry named mobile and electronics giant Samsung as a participating supplier at the time.
Best Buy says it sources from a “wide variety” of domestic and international suppliers, though its 20 largest suppliers accounted for approximately 79% of the merchandise the retailer purchased in its previous fiscal year, according to its latest 10-K.
Its largest five suppliers — Apple, Samsung, HP, LG and Sony — made up about 57% of merchandise purchased that year, a figure that has stayed roughly consistent in recent years.
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