Consumers are finding room for electronics in their budgets

Best Buy announced this week that it’s raising its outlook for the fiscal year. This follows a second quarter that saw the retailer’s comparable sales increase 4.1%.

Consumers are finding room in their budgets for new electronics. The retailer Best Buy announced this week that it’s raising its outlook for the fiscal year. This comes after a strong second quarter, where the company’s comparable sales increased 4.1%.

The market for televisions has not been what you’d call “booming” recently — partly because TVs haven’t changed much recently. But now, there’s a new kind called an RGB television. It’s meant to create a really vivid picture, explained Wedbush’s Matthew McCartney.

“When you’re watching that movie with that dark scene, those blacks actually look really black, and then those colors can really pop,” he said.

Shoppers have been going to Best Buy to check out those colors. While they may not be buying the biggest and fanciest new TVs (which can cost thousands), they’re still upgrading.

“It’s the piece of equipment that’s bringing people into the door,” McCartney said. “We call that ‘the halo effect.’ You know, ‘We saw this TV, it’s out of our budget, but there is something else that is a little bit better than what we had before.’”

Domestic TV sales at Best Buy went up more than 10% in the second quarter from last year. Computer sales also grew, which is mostly due to the average selling price being driven up significantly by high memory costs.

But BDO’s Natalie Kotlyar said that people who bought computers during the pandemic are now itching for new ones.

“All of those systems are now becoming more outdated,” she said.

Also, Kotlyar pointed out that some people want new computers that can better support AI applications and added that as artificial intelligence develops, it could potentially spur a whole new round of computer purchases a year or so from now.

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