As much as there is surprise at the death of Future Shop in Canada, the real surprise is the execution of the closure rather than the fact that it happened. The Future Shop brand, long held by Best Buy, has been barely differentiated from its parent company for a long time. For people buying electronics, Future Shop was for people who preferred the colour red to blue, as this was the only difference between the two companies, the trim on their respective buildings and the uniforms of their employees.
This is coming after a year of retail shake-up in the country, so it’s only natural that people are questioning what has changed in the past several years to see the company suddenly fold. The rise of online shopping might be blamed, or increasing consumer debt making people unwilling to buy big ticket items. It might just be that everyone has a large television now, and that large television works quite well, so the main business of a big box electronic store suddenly makes a lot less sense than it used to. In this case, you’ve got two businesses doing the same job, selling to the same people, often in the same place general area – some Future Shop and Best Buy locations shared a parking lot – with the same price. The fact that the two companies overlapped so much made the demise of one inevitable.
To be fair, part of the blame for this is going to rest with Best Buy, which expanded into Canada in a fairly stupid way but did so in the middle of a boom in television sales. It didn’t matter that they were setting up directly across from another store within the same market and eventually would buy them out anyway. It also didn’t matter that they had the same online store selling the same goods at the same price. Best Buy managed to stumble into success in Canada in spite of doing a lot of things wrong just because they also happened to enter the market at the right time. People wanted televisions, Best Buy and Future Shop had lots of televisions, and as a result business was good.
Now business is less good, and while it’s tempting to blame a lack of consumer confidence or economic problems, the big issue here is that we all have our televisions, so the market is saturated and not a boom that was experienced when the electronic retailer went north of the border. There isn’t a good reason to replace our electronics at the moment, no emergent technology that everyone has to own, and as a result you’re going to get a downturn in electronics. That’s a given, and it’s going to stay that way until the next must-have device gets developed.
It’s a bad thing for the people employed by the company, as they appear to have had no real warning that these plans were going to be put forth, and were informed of the end of their employment at an early morning meeting on a Saturday, which has to be the least pleasant way to break the news. It’s not really a bad thing for consumers, since it’s not like the two parts of the same company were actively competing, you weren’t going to see different sales at each branch and the inventories were basically identical. It’s probably a good thing for Best Buy overall, since they can now get rid of a ton of redundancies and reduce the cost of business overall. The main thing is it’s not something that is very surprising, since it was a strangely set up company.
