Splurging on Taylor Swift tickets and a 'funflation' economy is hitting Best Buy's sales, says its CEO
Shanna Madison/Chicago Tribune and Spencer Platt via Getty Images
- Best Buy CEO Corie Barry thinks "funflation" is hurting her company's bottom line.
- "Funflation" refers to higher consumer demand for fun experiences, which inflates the prices of these experiences.
- Big ticket items in electronics are drawing less consumer interest than Taylor Swift tickets and other fun experiences, Barry said at a Fortune event.
Corie Barry, the CEO of electronics retailer Best Buy, thinks that splurging on Taylor Swift tickets and "funflation" is hurting her company's bottom line.
Funflation refers to higher demand for fun experiences, which drives up their prices.
Best Buy's TVs and computers are seeing reduced demand thanks to consumers shifting their attention to expensive necessities and experiences they missed during the pandemic, Barry said onstage at Fortune's Most Powerful Women summit on Wednesday, according to a Fortune report.
"'Funflation,' Taylor Swift… those experiences are really where people are willing to pay," said Barry, who added that this meant "bigger ticket items in electronics are not right now where people are interested."
Best Buy's second-quarter revenues fell to $9.5 billion in the current fiscal year, compared to $10.32 billion in the same period last year, per the company's financials. Second-quarter revenues in 2022 had also fallen, dropping from a peak of $11.8 billion in the second quarter of 2021.
Same-store sales — or sales at stores open for at least 14 months — declined by 6.2% year-on-year.
Barry told analysts in August after the company announced its most recent results that she estimates this year "will be the low point in tech demand after two years of sales declines."
However, while Best Buy might be feeling the impact of "funflation," this consumer spending is helping to prop up the US economy. Bloomberg analysts estimated in August that Taylor Swift and Beyoncé's concert tours would add around $5.4 billion to the US economy's GDP.
Brett House, an economics professor at the Columbia Business School, told Insider's Sirena Bergman that some fans could be forking out so much for Swift tickets — some paid as much as $20,000 — because of heightened savings during the COVID-19 shutdowns and the post-pandemic desire to buy experiences instead of goods.
And the Bank of America analysts wrote in a September report that consumer spending was shifting towards experiences. The analysts also predicted "solid growth" for the live entertainment industry.
Best Buy and Barry did not immediately respond to requests for comment from Insider, sent outside regular business hours.
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