Best Buy can't fill some online orders for Christmas

Best Buy gave its online customers just about the worst news possible four days before Christmas: Your order has not been filled.

The Richfield-based retailer said in a statement Wednesday afternoon that it will not be able to process some of its online orders by Friday, including some made the day after Thanksgiving.

"Due to overwhelming demand of hot product offerings on BestBuy.com during the November and December time period, we have encountered a situation that has affected redemption of some of our customers' online orders," it said. "We are very sorry for the inconvenience this has caused, and we have notified the affected customers."

It is not clear how many orders have been affected or how large a range of products is involved. Best Buy spokeswoman Lisa Hawks declined to answer questions beyond the statement.

Analysts said the episode could prove a significant setback for the company, which already disappointed investors this month with a profit report that wasn't as strong as expected.

"This is not good for a tech company," retail expert Dave Brennan said. "This will translate to the bottom line, and it will weaken sales going forward."

Customers immediately weighed in with complaints to Best Buy's community forum website.

"Never shop at Best Buy," one Twitter entry said. "Ordered TV on BlackFriday & they cancelled my order today, not in stock. Said not their problem. No present 4me!"

"Every other place I ordered from has already arrived or at least I have a tracking number," a blogger said. "I expected a lot more from Best Buy."

One of Best Buy's disgruntled customers was Todd Schultz of Sauk Rapids, Minn., who ordered a Toshiba laptop for $349.99 on the Monday after Thanksgiving, only to learn on Dec. 15 that it was out of stock.

In a letter to Best Buy customer service, Schultz wrote, "As a Minnesotan I preferred to do my business with a Minnesota-based company. But I can say with honesty, that I won't shop at Best Buy again."

In addition to TVs, iPads also appeared to be on back order, as well as other tablets, cameras, laptops, PS3 games and the Nintendo Wii.

"Personal disappointment will go along with this, and it will be remembered," said Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas. "From a publicity standpoint, this is devastating. You have to ask yourself, 'Are people likely to go back to the same source or go to other sources the next time?'"

Best Buy shares sank earlier this month when the company surprised Wall Street with disappointing earnings attributable to a shift in strategy that focuses on market share over profit margins. Sales at U.S. stores open at least a year grew just shy of 1 percent in Best Buy's third quarter ended Nov. 30. That marked the first gain in same-store sales in almost two years, but it led to significantly smaller profit margins.

CEO Brian Dunn has been under pressure to deliver a strong holiday season after a year of strategic missteps in overseas markets ranging from China to the United Kingdom. Since Dunn became CEO in June 2009, Best Buy shares have fallen nearly 40 percent.

Best Buy's online announcement came late in the trading day Wednesday. The stock closed down 18 cents to close at $22.88.

Earlier this year, Minneapolis-based Target had two well-publicized online gaffes when it launched its own online site after a decade of outsourcing service from Amazon.com. The site crashed in September, during the launch of the Missoni line of designer apparel and accessories, and again in October.

The nation's second-largest retailer suggested Wednesday that online is holding its own for the holiday season.

"Our team is working around the clock to ensure our guests receive their items by Christmas," said Target spokesman Lee Henderson, who declined to categorize online volume this year.

David Phelps • 612-673-7269