Best Buy 2007 Annual Report Download - page 29

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and higher levels of unemployment, which have not been
described. You should carefully consider each of the
following risks and all other information set forth in this
Annual Report on Form 10-K.
If any of the events described below were to occur, our
business, financial condition, results of operations, liquidity
or access to the capital markets could be materially
adversely affected. The following risks could cause our
actual results to differ materially from our historical results
and from results predicted by forward-looking statements
made by us or on our behalf related to conditions or events
that we anticipate may occur in the future. All forward-
looking statements made by us or on our behalf are
qualified by the risks described below.
If we do not anticipate and respond to changing
consumer preferences in a timely manner, our operating
results could suffer.
Our business depends, in large part, on our ability to
introduce successfully new products, services and
technologies to consumers; the frequency of such
introductions; the level of consumer acceptance; and the
related impact on the demand for existing products, services
and technologies. Failure to predict accurately constantly
changing consumer tastes, preferences, spending patterns
and other lifestyle decisions, or to address effectively
consumer concerns, could have a material adverse effect
on our revenue, results of operations and standing with our
customers.
Our growth is dependent on the success of our strategies.
Our growth is dependent on our ability to identify, develop
and execute strategies. While we believe customer centricity
and the pursuit of international growth opportunities will
enable us to grow our business, misjudgments could have a
material adverse effect on our business, financial condition
and results of operations.
Our results of operations could deteriorate if we fail to
attract, develop and retain qualified employees.
Our performance is dependent on attracting and retaining
a large and growing number of employees. We believe our
competitive advantage is providing unique end-to-end
solutions for each individual customer, which requires us to
have highly trained and engaged employees. Our success
depends in part upon our ability to attract, develop and
retain a sufficient number of qualified employees, including
store, service and administrative personnel. The turnover
rate in the retail industry is high, and qualified individuals of
the requisite caliber and number needed to fill these
positions may be in short supply in some areas.
Competition for such qualified individuals could require us
to pay higher wages to attract a sufficient number of
employees. Our inability to recruit a sufficient number of
qualified individuals in the future may delay planned
openings of new stores or affect the speed with which we
expand initiatives such as Best Buy For Business and
services. Delayed store openings, significant increases in
employee turnover rates or significant increases in labor
costs could have a material adverse effect on our business,
financial condition and results of operations.
We face strong competition from traditional store-based
retailers, Internet businesses and other forms of retail
commerce, which could materially affect our revenue and
profitability.
The retail business is highly competitive. We compete for
customers, employees, locations, products and other
important aspects of our business with many other local,
regional, national and international retailers. Pressure from
our competitors, some of which have a greater market
presence and more financial resources than we do, could
require us to reduce our prices or increase our costs of doing
business. As a result of this competition, we may experience
lower revenue and/or higher operating costs, which could
materially adversely affect our results of operations.
Our growth strategy includes expanding our business,
both in existing markets and by opening stores in new
markets.
Our future growth is dependent, in part, on our ability to
build or lease new stores. We compete with other retailers
and businesses for suitable locations for our stores. Local
land use, local zoning issues, environmental regulations and
other regulations applicable to the types of stores we desire to
construct may impact our ability to find suitable locations,
and also influence the cost of constructing and leasing our
stores. We also may have difficulty negotiating leases or real
estate purchase agreements on acceptable terms. Failure to
manage effectively these and other similar factors will affect
our ability to build or lease new stores, which may have a
material adverse effect on our future profitability.
We seek to expand our business in existing markets in order
to attain a greater overall market share. Because our stores
typically draw customers from their local areas, a new store
may draw customers away from our nearby existing stores