CD sales have been taking a hit for years, but they’re about to get even worse. In a recent conference call with analysts, Best Buy Chief Executive Brian Dunn told analysts they’d be significantly reducing the amount of space for CDs before the end of the year. “We’ll have another store reset before the holidays, which will include an increase in the space for higher-growth and, in the aggregate, higher-margin categories, like Best Buy Mobile, e-readers and gaming, with a heavy emphasis on new gaming platforms and pre-owned game titles,” he said. “This will be enabled by our reorganization of the DVD and CD sections. The CD section in particular will shrink in space allotment.”
With Virgin, Tower and Circuit City stores closing in the last few years, one of the easiest places CDs were readily available has been at Best Buy stores.According to industry estimates, about 20% of Best Buy stores have been allocated for CDs and DVDs. With less space will also come less sales, obviously. CD’s were always a loss leader at the chain, something to entice shoppers to come into a store. With the increase in downloading, both legally and illegally, it doesn’t make as much sense to give up all that space. But with one of the main retailers significantly shrinking their space, it’s another death knell for a format that increasingly seems on its way out. Analysts have stated that digital sales will outpace physical sales in 2011, but this might speed things up even more.
