Best Buy billionaire founder ‘feeling really good about the holiday season’ despite rising inflation
4 min readBest Buy founder Richard Schulze argues ‘severe or serious shortages’ of products at the retailer are not anticipated amid supply chain disruptions.
Best Buy founder Richard Schulze said Wednesday that he is “feeling really good about the holiday season” despite rising inflation.
Schulze acknowledged that there will be “spot outages,” but told “Cavuto: Coast to Coast” he remains optimistic about the holiday shopping season, noting that he believes customers will remain “healthy, strong and accepting” into next year.
He also said Best Buy is not “expecting severe or serious shortages” of products amid supply chain disruptions, which have made it more difficult for consumers to find certain items at stores across the country.
In October, consumers have seen more than 2 billion out-of-stock messages online, according to Adobe, which noted that currently, electronics has the highest out-of-stock levels, followed by jewelry, apparel, home and garden, and pet products.
Schulze told host Neil Cavuto that Best Buy positioned itself to make sure products are available on store shelves by planning ahead and “recognizing that we needed to get ahead of the curve.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BBY | BEST BUY CO., INC. | 132.86 | -2.07 | -1.53% |
He noted that he has been in contact with senior management who “clearly care about our ability to be in stock through these peak seasons.”
Schulze did, however, acknowledge that a few items in high demand, including Apple products, gaming and appliances, could be a bit challenging to find due to the current economic climate.
As it pertains to Best Buy, Schulze said based on everything he has heard, items will mostly be in stock and pricing will “be as it always has been” even in an inflationary environment.
“Best Buy is a value-driven company and our sense here is that inflation is not something that we expect will be hitting our products for our customers,” he told Cavuto.
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Last week, it was revealed U.S. consumer prices accelerated at the fastest annual pace in more than 30 years as supply chain bottlenecks and materials shortages persisted and gasoline prices surged.
The consumer price index climbed 6.2% year over year in October, the Labor Department said. The increase marked the largest annual gain since November 1990. Prices rose 0.9% month over month.
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Analysts surveyed by Refinitiv were expecting prices to rise 0.6% in October and 5.8% annually.
The price of appliances shot up 6.6% in October compared to the same time last year, according to the Labor Department, and the price of information technology commodities increased 3.1% year over year with computers, peripherals, and smart home assistants soaring 8.4% compared to October 2020. Televisions increased a whopping 10.4% in October compared to the same time last year, according to the Labor Department.
Schulze argued that despite inflationary pressures, he is seeing “little or no hesitation on the part of the consumer to buy the products” that they want and need.
“I think consumers are always out for the next hot product and/or updating, upgrading, whether it is television, whether it is computers, whether it is appliances,” he added.
Schulze then pointed out that consumers for the most part have always aspired to own the latest technology and models, noting that “we don’t see a slowdown.”
“Our stores are busy. Our online sales are busy,” Schulze continued. “I would have to say that we’re feeling really good about the holiday season ahead of us.”
Schulze provided the insight one day after it was revealed consumer spending accelerated in October as shoppers kicked off the holiday shopping season earlier than usual due to the supply chain bottlenecks.
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Retail sales, a measure of spending at restaurants, stores and online, rose 1.7% last month, according to the Commerce Department. Analysts surveyed by Refinitiv were expecting a 1.4% increase. The reading was 16.3% above year-ago levels.
The nation’s largest retail trade group projected last month that holiday sales may “shatter previous records” even with the economy facing a range of headwinds including supply chain disruptions, inflationary pressures to widespread labor shortages.
Richard Schulze acknowledges there will be ‘spot outages,’ but remains optimistic about the holiday shopping season and notes customers will remain ‘healthy, strong and accepting’ into next year.
Last month, the National Retail Federation (NRF) estimated that spending could grow as much as 10.5% over 2020 during the holiday shopping season, with total sales reaching between $843.4 billion and $859 billion. By comparison, sales grew 8.2% to $777.3 billion last year.
On Tuesday, it was also revealed that U.S. consumer confidence plunged to a 10-year low in November, reflecting heightened concerns among Americans about hotter-than-expected inflation and the rising price of everyday goods.
The University of Michigan’s consumer sentiment index fell to 66.8 in November – down sharply from the October reading of 71.7 and well below economists’ forecast for a reading of 72.4.
The survey showed that 1 in 4 consumers have reduced their living standards as a result of higher prices, and more than half of families expect to see their real income reduced in the year ahead when adjusted for inflation.
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FOX Business’ Megen Henney, Daniella Genovese and Jonathan Garber contributed to this report.
