Tuesday, December 16, 2008

Best Buy Cites "Historic Slowdown", cuts Capital Spending Plans in Half

by Bill McBride on 12/16/2008 09:00:00 AM

Press Release:

“The historic slowdown in the economy and its effect on our business over the past 90 days have been the most challenging consumer environment our company has ever faced,” said Brad Anderson, vice chairman and CEO of Best Buy. “We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace."
...
"[B]ased on the recent changes we’ve seen in consumer behavior and the potential for worsening consumer spending, we need to prepare our organization to operate in a wide range of potential macro economic scenarios in the coming year. Additional prudent actions will be taken to prepare the business, such as reducing our capital spending by approximately 50 percent next year, including a substantial reduction in new store openings in the United States, Canada and China."
emphasis added
Company after company is announcing reduced capital spending plans, and this means non-residential investment will decline sharply next year.