Best Buy Bowing Private-Label Plasma, MP3 Players

From Twice.com:
http://www.twice.com/article/CA6351603.html&

And here's some commentary from my friend Dave Reid, whose twenty-five years of senior management experience at a major Canadian retail chain give him some authority on the subject:

I think that a key takeaway is that as a mass-market retailer that they are going downstream in price sensitivity to grow margins and unit volume with their in-house brand. The trouble is that unit price deflation relative to name brands will minimize the margin growth. It's a slippery slope since they'll be putting their offerings on the table beside nontraditional electronics retailers like Wal-Mart. This type of competition will eventually scratch the itch of lowball buyers and potentially backfire as price, at the cost of margin to remain competitive, will see any short term volume growth (next 3-5 yrs) erode as consumers will flee for deals. The engineered gains in margin fall away. Then comes the challenge of maintaining respectability as a retailer not a price player. I think 25% private label could be a harbinger of future struggle.

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