Best Buy Pursues Electronic Product Code Strategy to Increase Supply Chain Efficiency; Major Suppliers to Tag Pallets and Cases By 2006

Business Wire, August 31, 2004

MINNEAPOLIS -- Best Buy Co., Inc. today announced the rollout of an electronic product code (EPC) strategy designed to increase its supply chain efficiency over the next several years. The company plans to leverage radio frequency identification (RFID) technology to drive the change. RFID allows retailers to easily and efficiently track products as they move from the manufacturer to the stores.

Since RFID systems rapidly and simultaneously read tags, Best Buy believes the EPC strategy can improve customers' in-store experiences and significantly increase the organization's efficiency by increasing product availability, reducing time spent on processes in distribution centers and stores, enhancing real-time product information capabilities, and increasing speed to market.

"Our goal is to create a flexible, high-velocity supply chain operating with better product availability for customers at a lower total cost for the company," said Bob Willett, executive vice president of operations for Best Buy. "We believe RFID technology can transform the way products are produced, distributed and merchandised. Our own operations, customers and suppliers can share in the benefits."

Best Buy's EPC strategy supports the rollout of the concept to manufacturers, suppliers and customers. The company determined this strategy after understanding others' perspectives on EPC technology through its membership in EPC Global, an organization working to standardize the global implementation of EPC in an ethical and responsible way. In addition, Best Buy participated in an Accenture-supported consortium that examined the potential benefits of RFID implementation across the consumer electronics supply chain. The company also conversed with suppliers and surveyed customers. Best Buy now plans to team with Accenture to further define its RFID program strategy, manage rollout and implementation, and assist suppliers with meeting its integration and compliance requirements.

Willett added, "Our EPC strategy should ultimately result in a better customer experience. Customers will be able to more easily find the products they want, when they want them. In the long term, we hope that implementing EPC will enable us to enhance customer service and expedite processes for returns and warranties."

Best Buy's major suppliers are expected to begin applying EPC-compliant tags to product cases and pallets by Jan. 2, 2006, with all product cases and pallets tagged by May 2007. In preparation for these changes, the company also expects to test several applications of the technology in select stores and distribution centers in the coming year.

This news release contains forward-looking statements that reflect management's current views and estimates regarding future market conditions, company performance and financial results, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning. These statements involve a number of risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: general economic conditions, acquisitions and development of new businesses, product availability, sales volumes, profit margins, weather, foreign currency fluctuation, availability of suitable real estate locations, our ability to react to a disaster recovery situation, and the impact of labor markets and new product introductions on our overall profitability. A further list and description of these risks, uncertainties and other matters can be found in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2004, and in our other periodic reports filed from time to time with the Commission. Best Buy cautions that the foregoing list of important factors is not complete and assumes no obligation to update any forward-looking statements that it may make.

About Best Buy Co., Inc.

Best Buy Co., Inc. (NYSE:BBY) is a Fortune 100(R) growth company that continually innovates to create superior customer experiences. Through more than 750 retail stores across the United States and in Canada, our employees connect customers with technology and entertainment products and services that make life easier and more fun. We sell consumer electronics, home-office products, entertainment software, appliances and related services. A Minneapolis-based company, our operations include: Best Buy (BestBuy.com), Future Shop (FutureShop.ca), Geek Squad (GeekSquad.com) and Magnolia Audio Video (Magnoliaav.com). We support our communities through employee volunteerism and grants from The Best Buy Children's Foundation.