Best Buy Co Inc (NYSE:BBY) is planning to halt CD sales this summer.
A recent report claims that Best Buy told suppliers that it will no longer carry CDs starting on July 1. The decision was made as the CD market in the U.S. continues to decline and digital sales increase.
Best Buy’s decision to cut CDs from its selection of items won’t overly hurt the company’s earnings. Unnamed sources claim that the business is only bringing in about $40 million per year for the retailer.
While Best Buy is cutting CDs from its stores, it will continue to carry vinyls. Sources say the company will start merchandising them alongside record players. BBY will likely only keep vinyls around for another couple of years due to agreements with suppliers, reports Billboard.
While digital options for purchasing music have been around for some time now, it’s only been in recent years that they have overtook sales of CDs. This change occurred in 2015. CD sales will likely continue to decline as digital sales become more prominent.
It isn’t just Best Buy that has concerns over slowing CD sales. Target Corporation (NYSE:TGT) is also pushing for a change in CD sales from suppliers. The retailer wants to switch to a consignment agreement. This means it won’t pay for the CDs until they are actually bought by a customers. TGT is giving music suppliers until April or May to make a decision about the change.
BBY stock was down slightly as of noon Monday.
As of this writing, William White did not hold a position in any of the aforementioned securities.