April 16, 2007

Your Input Needed: Circuit City

Recall that Circuit City elected to eliminate higher-paying positions on the sales floor of their stores.

In a transcript of their fourth quarter earnings results, management states that "There is no data in the company’s analysis that the service level has dropped due to the absence of the top paid employees."

Here's where I'd appreciate your input.

  • Do you believe that a company can provide the same service levels without the store employees who were compensated the most (increased compensation would imply more talent or more experience)?
  • If you were Circuit City management, what would you do to compete against Best Buy and web-based electronics retailers? What would you do from a merchandising, pricing, service, in-store presentation, or strategic standpoint?