What caused CompUSA and CircutCiity to fail?

[dullard]

What amazes me even more is that pharmacy stores are starting to sell wine. My local CVS, started to sell low alcohol content wines. I am referring to the non-expensive wines that you usually find at most grocery stores now a days.

As long as you drink it in moderation, alcohol is a health item. That fits in quite well with a pharmacy store's concept of selling health-related products.

 

[Oyeve]

What amazes me even more is that pharmacy stores are starting to sell wine. My local CVS, started to sell low alcohol content wines. I am referring to the non-expensive wines that you usually find at most grocery stores now a days.

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The CVS on the block where I live doesnt sell any alcohol. They stopped selling cigarettes a few years ago as well. I go there rarely as they removed the self checkout machines and for some reason the old bittys in my neighborhood do their grocery shopping there and have 5 miles of coupons.

 

[dullard]

The real answer to them closing is: all of the above. Expensive retail stores, terrible inventory, at terrible prices, and terrible business decisions trying desperately to do anything but actually compete with online (anyone remember those old ~$500 off anything deals as long as you sign up for ~$1000 more in monthly payments*)? Burning your customers over and over again doesn't keep you viable in the long run.

I'd often see 5 year old tech trying to be sold at slightly above the price of current tech (it would just stay on the shelf year after year at the same price). Management didn't understand the value of their products. If you sell a highly perishable good, you need to treat it as perishable. You can't sell a banana from 6 months ago at the same price as a new banana. It doesn't work that way, and it never will.

But a major killer not mentioned above was lack of people paying use taxes on internet orders. With margins often just 2% or 3%, a 7% sales tax destroys your business. This is especially true with the major tech buyers--the price conscious youth.


* Example: $400 off if you just sign up for $21.95/month additional payments for 36 months ($790.20). https://farm8.static.flickr.com/7527/15804878215_d83d6672bc_b.jpg What a great deal, buy over priced technology and also get a small loan at 22.91% interest!

 

[Darwin333]

What amazes me even more is that pharmacy stores are starting to sell wine. My local CVS, started to sell low alcohol content wines. I am referring to the non-expensive wines that you usually find at most grocery stores now a days.

Rite Aid is well known as the pharmacy store that sells the largest assortment of game credit or timed membership cards for online or multiplayer games. Never go there if you want to buy any of those cards, I have seen gaming addicts scratching the cards and writing down the codes, even when the card rack is in front of the cashier and one of them is already probably calling the cops.

Walgreens started selling hard liquor around here. Pretty sure they've always sold wine but it has been rather recent that they started selling beer and liquor.

 

[Darwin333]

Some parts of the US have drive-thru liquor stores. It's a great idea, there are no possible problems with giving people instant access to large amounts of alcohol while they're behind the wheel.

Shrug, I don't see the difference really. The vast majority of people drive to the store to buy their booze so what does it matter if they have to get out of the car to get it or not? We have drive through daiquiri stores here where you can order not only daiquiris but mixed drinks at the window. They put a piece of tape over the straw hole so it isn't considered an open container but how many people do you think actually wait until they get to where they are going before starting to drink it?

 

[Craig234]

It seems to me it was the competition of the no-store-overhear internet. I want to buy a game - will CompUSA pay to have it sitting on a shelf locally and charge less than I can get it online? Will they pay to keep a graphics card in a store and charge less than Newegg without the overhead? Same with Circuit City.

Somehow a bay area audio visual retailer has remained in business, called 'Video Only'. I paid for a tv there yesterday and discussed this very topic with the salesperson (and other chains that went of business as well - she said a lot of people there used to work for the other chains). Somehow, they were selling the tv for hundreds less than any of the online black friday deals.

And they still haggle a bit - local delivery? OK, free including installation. Charge to take and recycle broken previous 65"? $30 fee - ok, waived. Warranty to 5 years $130. Oh Costco is $90? Matched.

There always seems to be talk about Best Buy having issues also, the last store chain like this.

I remember there was a company that tried to compete with Fry's in the bay area, I think from Japan.

Their approach was, 'better service, quick checkout', but top prices, across the street from Fry's. Turns out people want cheap. They didn't stay in business long.

 

[pete6032]

If its not a drive through liquor store, people will drive their own car and park and go in. Not sure how a drive through store is any different than a walk-in store when it comes to "giving people instant access to large amounts of alcohol while they're behind the wheel"

 

[who?]

If they walk in you can tell that they're already intoxicated and it's illegal to sell to them because of that.

 

[GagHalfrunt]

If its not a drive through liquor store, people will drive their own car and park and go in. Not sure how a drive through store is any different than a walk-in store when it comes to "giving people instant access to large amounts of alcohol while they're behind the wheel"

What part of "behind the wheel" don't you understand? There is a difference between walking in the door to get served and being served with the motor running. I grant that it's a small difference, but it's a difference nonetheless. It's probably more optics than anything, but in a world with way too much DUI it's a mixed message to hand alcohol to a person WHILE they're driving.

 

[shortylickens]

oops

 

[who?]

Parking and walking in requires too much effort.

 

[Pulsar]

What, is Google down again?

Main reason is failing to keep up with consumer demand. People wanted ridiculous selection at extremely low prices. As unreasonable as that sounds, Amazon and Newegg and the other online retailers were able to offer it.

Smells like homework to me...

 

[Alpha One Seven]

Speaking from my brief experience the abuse of returns killed CompUSA. As an employee shortly following Xmas, I looked up at a stack of Compaq computers that people returned. not 10, not 20, but more than 100 sitting on multiple pallets. In fact the returns from buyer's remorse was so strong Compaq developed a process to ship specialized repackaging boxes to CompUSA so they could repack them and sell them as used for 15% off.

People in America love the freebie return policy. It is one thing to burden this as a business on items with margins >40%, but on a desktop PC with a margin <5% that was pure destruction. Hell, even Costco changed their return policy on televisions when they expanded greatly into the southeast. It was only 2-3 years after I started my membership when they changed the returns on TV from practically lifetime to 90 days. And yet I also witnessed a-holes buy big screen TVs for the Superbowl and then try to return them. BB finally wiised up and placed a special return policy on them during a period leading up to the SB.

No one in America--speaking of cowsumers--takes responsibility for buying and keeping based on their decision. Most things, I'm betting, that are returned are done so for any reason other than defect.

Fry's Electronics sells their returns for a small discount too, it's a good practice.