Best Buy cuts back on CD sales
Fox Business Outlook: Best Buy shuttering standalone stores which account for just over one percent of company's overall revenue in malls across America.
Best Buy on Monday said it will significant reduce its focus on sales of compact discs, better known as CDs, though the electronics retailer denied reports that it would discontinue the format entirely at its stores.
“The way people buy and listen to music has dramatically changed and, as a result, we are reducing the amount of space devoted to CDs in our stores,” Best Buy said in a statement. “However, we will still offer select CDs, vinyl and digital music options at all stores.”
CD sales have plunged in the last two decades amid the rise of digital music and streaming options. CD sales generated just $1.1 billion in 2017, down from a peak of $13.2 billion in 2000, according to the Record Industry Association of America. Sales figures by unit have also plummeted, from 942.5 million discs sold in 2000 to less than 88 million last year.
Fortune was first to report Best Buy's plan to cut back on CD sales.
Multiple outlets reported in February that Best Buy planned to end CD sales entirely by July 1 due to declining revenue. The Verge reported that Best Buy earned just $40 million from CD sales annual, citing sources familiar with the matter.
Target was also said to be reconsidering its CD business. The retailer reportedly began selling CDs on a consignment basis, which means that it would only pay music labels for CDs that had already been purchased by store customers.