Future Shop closures a surprise, but not a shock: retail analyst

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VANCOUVER (NEWS1130) – Your local Target store was not the only company shutting down over the weekend. Future Shop shuttered 66 of its locations across the country and announced another 65 are being converted to Best Buy stores.

Parent company Best Buy Canada says the closures mean the loss of 500 full-time and 1,000 part-time jobs.

“It was a surprise but not a shock,” says John Williams, a senior partner with Toronto-based retail analyst firm JC Williams Group.

“It was almost inevitable. About 30 per cent of people are now buying electronics online. So sooner or later, it had to hit the stores. Certainly, they would have seen this coming. They would watch the shift from bricks and mortar in-store shopping to online. And when it reaches up to 30 plus per cent in the last quarter, somebody had to make the right decision.”

Williams says the online trend isn’t limited to electronics. “[Consumers are] purchasing much, much more than electronics. Seventeen per cent of apparel is purchased online. That was zero a decade ago or close to it.”

But he points out we shouldn’t link the failure of Target in Canada to this as part of a larger trend.

“Target had nothing to do with their digital world. They were just terrible managers. Best Buy and Future Shop are a very professional team and they held up. They still have a huge share of market.”

What began in 1982 as a single store, Future Shop became the largest technology retailer in Canada by the 1990s, getting scooped up by US giant Best Buy in 2001 for $580 million.

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