Best Buy 2011 Annual Report Download - page 8

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revenue category includes extended warranties, repair, delivery, computer-related services and home theater installation.
The other revenue category includes non-core offerings such as snacks and beverages.
Although Future Shop and Best Buy branded stores in Canada offer similar revenue categories (except for appliances,
which are only offered at Future Shop stores), there are differences in product brands and depth of selection within
revenue categories. On average, approximately 30% of the product assortment (excluding entertainment) overlaps between
the two store brands. Further, Geek Squad services are only available in the Best Buy branded stores with Future Shop’s
service offerings branded as Connect Pro.
Canada Best Buy Mobile offerings are included in our home office revenue category. Revenue from Canada Best Buy
Mobile stand-alone stores is primarily derived from mobile phone hardware, subscription service commissions from mobile
phone network operators and related mobile phone accessories.
In China, our Five Star and Best Buy branded stores have offerings in four revenue categories: appliances, consumer
electronics, home office and services. Our China stores do not carry products in our entertainment revenue category.
Appliances includes major appliances, air conditioners, small electrics and housewares. The consumer electronics revenue
category consists of video and audio products, including televisions, digital cameras, MP3 players and accessories. The
home office revenue category includes desktop and notebook computers, tablets, mobile phones, traditional telephones
and accessories. The services revenue category includes extended warranties, repair, delivery, computer-related services
and installation.
Our Best Buy branded stores in Mexico and Turkey have offerings in six revenue categories: consumer electronics, home
office, entertainment, appliances, services and other, with products and services similar to those of our U.S. Best Buy
stores.
Distribution
Domestic Segment
Generally, U.S. Best Buy, U.S. Best Buy Mobile, Magnolia Audio Video and Pacific Sales stores’ merchandise, except for
major appliances and large-screen televisions, is shipped directly from manufacturers to our distribution centers located
throughout the U.S. Major appliances and large-screen televisions are shipped to satellite warehouses in each major
market. These stores are dependent upon the distribution centers for inventory storage and shipment of most merchandise.
However, in order to meet release dates for selected products and to improve inventory management, certain merchandise
is shipped directly to our stores from manufacturers and distributors. Contract carriers ship merchandise from the
distribution centers to stores, though Pacific Sales stores’ merchandise is generally fulfilled directly to customers through
two distribution centers in California. Generally, U.S. Best Buy online merchandise sales are either picked up at U.S.
Best Buy stores or fulfilled directly to customers through our distribution centers.
International Segment
Our small-format The Carphone Warehouse and The Phone House stores’ merchandise is shipped directly from our
suppliers to our distribution centers across Europe. Contract carriers ship merchandise from the distribution centers to
stores. Stores hold the immediate stock requirement and the distribution center in each market holds additional inventory.
Our large-format Best Buy branded stores in the U.K. have distribution methods similar to that of our U.S. Best Buy stores.
Our Canada stores’ merchandise is shipped directly from our suppliers to our distribution centers in British Columbia and
Ontario. Our Canada stores are dependent upon the distribution centers for inventory storage and shipment of most
merchandise. However, in order to meet release dates for selected products and to improve inventory management,
certain merchandise is shipped directly to our stores from manufacturers and distributors. Contract carriers ship
merchandise from the distribution centers to stores.
We receive our Five Star stores’ merchandise at more than 40 distribution centers and warehouses located throughout the
Five Star retail chain, the largest of which is located in Nanjing, Jiangsu Province. Our Five Star stores are dependent
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