Greenberg: Why Best Buy, on the Margin, Can't Win

 

This article appeared at 1:50 p.m. EDT on RealMoney Aug. 25.

SAN DIEGO (RealMoney) -- When Best Buy (BBY) reports on Tuesday before the open, keep an eye on gross margins. This has been and will continue to be the story not just for Best Buy but increasingly for most of the big-box retailers as they get pummeled online -- or even cannibalize themselves with their own online operations.

Best Buy is an interesting case, because, like other retailers, in-store it matches prices from Amazon.com (AMZN) and other legit retailers. (There's fine print, of course: The lower price has to be from Amazon itself, not a third-party reseller.)

I'm proud to say I use the price-matching every time I go into a Best Buy (and other places, such as Staples (SPLS) ), and I do go into Best Buy (or, yeah, Staples) if I want something now. In California, there's no longer a tax advantage, and truth be told, in multiple Best Buys in recent months, the salespeople appear to be better trained than they were just a year or two ago.

I like giving salespeople the sale if they help me, but like everybody else I also like getting the best deal, even on a pack of batteries. Once I get the sales pitch, the first thing I do is whip out my iPhone and go straight to Amazon. Once I find the lower price, I go to the checkout, tell them I want to price-match, and the cashier calls over the manager to get approval. During the wait, I always ask the cashier how many customers price-match. The answer, so far, has been a consistent "Not that many," or around 30%.

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