Best Buy will stop selling CDs entirely as of Jul. 1, according to a new report on Billboard.
The retail giant, once the biggest music merchandiser in the U.S., has reportedly only made about $40 million annually from CD sales as of late, and they’ve finally decided to give in to the digital revolution.
Videos by PopCulture.com
Sources at the company say that Best Buy will continue to see vinyl for at least two more years, however, it’s not because the vintage records sell better than CDs have been. The retailer simply needs to keep a commitment it made with certain vendors. According to the insider, vinyl will be marketed alongside turntables and record players going forward, promoting a retro home stereo set-up.
CD sales in the U.S. dropped 18.5% last year. While digital music consumption is dominating more and more around the world, the U.S. is seeing the fastest decline of physical record sales.
According to the report, Target is also looking to get out of the CD game, though they’re going about it a little different. Sources say that the big box retailer is looking for a new arrangement with suppliers.
Right now, Target is obligated to pay for any CDs they receive within 60 days, regardless of whether they sell or not. If it chooses to return unsold inventory to the supplier, the store must eat the cost of return shipping to get the credit.
In the fourth quarter of 2017, the company gave an ultimatum to suppliers, saying the company would move to a scan-based trading model. This way, Target would only pay suppliers for the number of CDs scanned at their registers. This would be a huge hit for suppliers, but they don’t have much choice, as Target is such a huge presence in the market place.
Target initially planned to switch to this model by Feb. 1, but they’ve pushed the deadline back as far as May. 1 for music suppliers. However, they made the same move with DVD vendors, and the scan-based trading is already in effect on that side.
Target offered a statement to Billboard, clarifying that physical music and videos are an important part of their inventory.
“Entertainment has been and continues to be an important part of Target’s brand,” reads the company’s statement. “We are committed to working closely with our partners to bring the latest movies and music titles, along with exclusive content, to our guests. The changes we’re evaluating to our operating model, which shows a continued investment in our Entertainment business, reflect a broader shift in the industry and consumer behavior.”
