The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.
Best Buy is currently facing some pretty big challenges, and David thinks the company may not be able to survive a "three-pronged" threat. On the selection side, the company cannot compete with online players like Amazon.com or Netflix. Amazon.com offers considerably more choices, which has put a serious dent in Best Buy's sales over the years. On the price side, Wal-Mart is using its sourcing power and is really stepping up its foray into consumer electronics by offering lots of attractive deals. And finally, Apple's stores offer much better sales and service than Best Buy stores do. Apple employees are knowledgeable, helpful, and not pushy. David doesn't think Best Buy is going to die anytime, soon. However, he doesn't see its business improving, either. There's just too much pressure coming from all sides. He thinks it's better to stick to companies like Apple on the product side than to invest in retail.
Retail is in its largest period of transition ever. The companies left behind will bankrupt investors, while the few exceptional leaders benefiting from this change will see astounding growth in the years ahead. The Motley Fool has created a free report, "The Death of Retail," that highlights two companies, hand-picked by Fool analysts, that are set to dominate the future. To check out these two companies and learn more about the future of retailing, click here now -- it's free!
The article Best Buy May Not Survive originally appeared on Fool.com.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.