Canadian, Eh?

I used to love shopping at Eaton's; Woodwards; The Bay; even Marks and Spencers. They each had their flavor. Eaton's had an excellent toy department. Woodward's food floor couldn't be beat. The Bay's restaurant was always good for quick meal. Then the 1990s were unkind to big retail and we saw an extinction like the end of the dinosaurs. Between 1990 and 2000, Canada lost : K-Mart, Woolco (with Woolworths), Woodwards and Eatons from the retailer landscape. In their place more Zeller's stores and big box stores and the scourge... Walmart.
The day and age where you could walk into a department store and come out with anything was gone. First they started to lop off departments like gangrenious extremities: food floors, hardware departments, pet departments. Before Eaton's went under, they dumped almost everything; leaving their stores as fashion / softline outlets. The descent of diversity is understandable. Here's what it looks like:
Is it hard to use? Do-it-yourself materials are not good for a society addicted to novelty. No building supplies, no fabric (dry goods) deparment, no craft department. Zellers mostly dumped their craft department last year like a bride losing 5 lbs. before the wedding.
If it can die, it will die. Dump the pet department; and the grocery department; keep the deli for now (ham can't die-- really, I have a canned ham from my sixth birthday. Why did I can canned ham for my birthday? Don't ask).
Can the shipper-reciever strain his back lifting it? Dump the large items like washers and fridges. Keep TVs for now.
Is it a gift? People are selfish. Sell gifts as an accidental side dish and not a main course. Toss the china department and scale back on the housewares.
Will someone impulse buy it? If not, dump it. Keep the clothes and TVs. Dump all of the hardware stuff. If the TVs are hard to sell, sell only DVDs. Women buy more clothes than men, so skimp on the men's wear. Kids only buy clothes in September (school) and December (Christmas plays) so they're a waste of time.

With this die off in retail, almost everything retail is American. What's left? Mom'n'Pops stores; London Drugs; grocery stores with diversity. I think that sucks, but I like to look for the silver lining in the cloud.

There's no money in retail. While I was standing around like an idiot in a department I ran the numbers. There is such a small percentage left for net profit that if a butterfly flaps its wings in the Amazon, a retailer will lose money. Walmart voraciously pushes the wholesale price to widen their profit margin. In return, they can give a manufacturer millions of dollars in orders. The profit margin for the manufacturers is SO slim that they are bound to lose money. The manufacturer has to cut back on quality. If they don't control their costs, they'll go under. If they thumb their nose at Walmart, they're doomed. That's why diversity in retail is good all around: retailers can chase other retailers to push quality; and a supplier can honk off one retailer and remain in business. This effect has really weakened the economy at the same time it has flattened inflation. One sneeze and manufacturers across North America will pop like popcorn. As a Canadian, do I want my fellow Canadians standing atop a knife edge of profit? Leave the job of peddling junk for no money. Let the Americans do it. When that sneeze hits, let American companies take the hit.
What are Canadians doing? They're investing. Look at CIBC-Woody Gundy and TD-Canada Trust. They're powerhouses in US investing. While some white collar schmuck is beating down a price in a Walmart merchandising session, investment analysts are trying to thicken their profit margin. Every financial quarter, the news reports that Canadian banks have made a record profit. We grind our teeth and bankers lay low. What's happening there is that Canadian investment arms of these banks (RBC Financial, CIBC and many more) are going to war in foreign countries. They're fighting for dollars and they are cleaning up.

Let the Americans have their low margin stuff. Let them fight for retail chains that really aren't making profit but are only making sales.
Let the Americans keep the risky low profit industries. We'll keep our investment juggernauts, thank you.

tags: Canada, Retail, Zucker, Investing

Comments

Cheryl said…
Funny thing is, Zellers has been bringing back some of the stuff they dumped -- notably beds and large appliances. Not sure whether the trend will continue as they only seem to be available at the "flagship" (Target-lite) store at Tillicum.

Popular posts from this blog

These People LOVE Child Molesters

Why Etsy Sucks

John Anthony Bailey: The Sad Descent from "Sticks" to Dicks