Budget axe falls at Best Buy

Best Buy is out to cut spending -- $300 million of it.

The belt-tightening is seen as a reaction to Wall Street criticism that Best Buy hasn't done enough to rein in costs. In December, the company disclosed that its sales and administrative expenses rose 22 percent in the third quarter -- more than double the company's overall sales increase. The news caused Best Buy's stock to fall 12 percent in a single day.

Best Buy has been doing a lot of talking about customizing its stores to certain demo/psychographic customer profiles (Jill the soccer mom, Barry the affluent professional, etc). It seems inevitable that such customization would result in higher costs -- did nobody foresee this? And aren't $300 million in cuts going to impact service at a store that is trying to differentiate itself by being "customer-centric"? Not that customer-centricity ever got me a quick answer to my questions at Best Buy.

Pursuing a strategy for a short time and then quickly changing to another strategy is usually a poor idea.