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Originally Posted by mileflames
Northland
Why would they open a new Best Buy in the same mall as newer Future Shop?
Future Shop stores operate as a division of Burnaby-based Best Buy Canada Ltd., a wholly-owned subsidiary of Best Buy Co., Inc. (NYSE:BBY).
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Their strategy is probably to develop a "destination" area for buying electronics. They did the same thing at Deerfoot meadows. I would assume that they believe that the more you saturate a particular area, the more reason for electronic consumers to come shop there.
Short term, it's probably a good strategy, but long term I can see competitors like Wal-Mart and Loblaws continuing to diversify their electronic offerings and gradually get closer to matching the selection at BB & FS at a better price. Obviously the result is that BB/FS lose business. Long term, I think this strategy will hurt them as they will be managing too much real estate with not enough consumers.