# North American retail operations (bricks & mortar stores) shrinking?



## carverman (Nov 8, 2010)

Latest news...
Staples closing 140 stores out of 1846 across the US & Canada as their INSTORE sales slip but online sales go up by 8%.
Based on their Canadian performance, Target, unless they pull up their retail socks, may be next. 



> Sales also slipped nearly two per cent to $5.22 billion, but online sales ticked up by 8 per cent, which says the company is taking itself out of the big-box game and better positioning itself in the digital landscape to compete with online powerhouse Amazon.com.


http://www.cbc.ca/news/business/staples-to-close-140-stores-in-u-s-and-canada-this-year-1.2741945

Meanwhile..Sears appears to be in very deep red ink in the US..
http://www.chicagotribune.com/business/breaking/chi-sears-earnings-20140522-story.html



> Revenue was $7.88 billion for the quarter, down from $8.45 billion last year, a decline attributed largely to having fewer Sears and Kmart stores in operation. Poor performance at Sears Canada and the separation of Lands' End, which Sears spun off into its own public company last month, also contributedk the company said.
> 
> Sears announced last week it is looking at selling its 51 percent stake in Sears Canada.


http://www.orlandosentinel.com/busi...as-revenue-slides-12-20140820,0,5865691.story

These two are just an example that the retail market in NA seems to be changing, drifting away from Bricks and mortar stores to online sales. 
Sears has been generally more expensive for things like appliances than other big box stores. Customers are
more cost concious these days and shop around for the best bargains and free delivery where possible.

The cost of gas, time spent running around looking for appliances on sale, when it is all now just a keystroke 
away with your CC information on your home computer.

Good for the door to door delivery companies out there. including the postal corporations.
But not good news for the employees employed in retail for the closing stores and any future employees they would be hiring.


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## brad (May 22, 2009)

carverman said:


> Good for the door to door delivery companies out there. including the postal corporations.
> But not good news for the employees employed in retail for the closing stores and any future employees they would be hiring.


I think there will always be bricks-and-mortar retail stores for some things, it's just that there'll be a shakeout of the types of stores. Some people don't like buying clothese or shoes online; they want to try them on first. I actually buy most of my clothes and shoes online and it's fine, but plenty of people still prefer to see and try on first; I think there'll always be plenty of bricks-and-mortar apparel stores, especially for shoes. But other things like appliances and housewares will probably shift to online-only. I've bought our most recent large appliances online (clothes dryer, washer, dishwasher), and buy most housewares online. I hate shopping in stores and I hate having to go from store to store to find what I'm looking for, so buying online works well for me.

Yes it's too bad for people employed in the field, but we've gone through transitions like this before -- the automobile was bad news for all the people in the horse industry, for example.


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## sags (May 15, 2010)

Around here.............we get a big pile of newspaper flyers every week..........and a lot of people still "shop the flyers".

Everything is always on sale..........somewhere.


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## carverman (Nov 8, 2010)

brad said:


> I hate shopping in stores and I hate having to go from store to store to find what I'm looking for, so buying online works well for me.
> 
> Yes it's too bad for people employed in the field, but we've gone through transitions like this before -- the automobile was bad news for all the people in the horse industry, for example.


We have to rethink our lifestyles. With the price of gas, insurance rates, and repairs rising, maybe it's time for "old Dobbin" to make a comeback? 
The Amish certainly think that "one horse power" is a lot better for their lifestyle than polluting and expensive automobiles. 
Do we really need to go 100Kph and crash into each other in the process? 

Besides..old Dobbin is a example of green power self sufficiency... mow your hay, store it in a barn, feed it to Dobbin, who takes you where ever you want to go locally, and his only expense is a two pairs of horse shoes once in a while.
Dobbin's "exhaust" can be recycled into your garden to grow more organic veggies. When old Dobbin is ready for that "pasture in the sky"...he can still supply lots of glue and shoe leather..:biggrin:


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## sags (May 15, 2010)

People are broke. The retailers are hurting. The government needs to mandate 100% wage increases.


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## HaroldCrump (Jun 10, 2009)

sags said:


> The government needs to mandate 100% wage increases.


Well, to begin with, if they stopped lying about the true rate of inflation, that'd help.
But then the CPI adjustments they'd have to make on OAS, GIS, CPP, etc. would probably bankrupt them in a hurry.


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## carverman (Nov 8, 2010)

sags said:


> People are broke. The retailers are hurting. The government needs to mandate 100% wage increases.


Kidding aside, wouldn't that just add more fuel to inflation over what it is already?
Harper's plastic money doesn't buy as much as the old paper money did 5 or even 10 years ago.
$20 buys you about 14 liters of gas, or about 4 steaks for the barbie. 

But to make that $20 take home pay, you need to earn about $30 an hour to pay for income taxes, C PP, EI, 
and if buying any goods that have sales tax applicable, that's another $2.60 already removed from the buying power of that $20 bill.


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## carverman (Nov 8, 2010)

HaroldCrump said:


> Well, to begin with, if they stopped lying about the true rate of inflation, that'd help.
> But then the CPI adjustments they'd have to make on OAS, GIS, CPP, etc. would probably bankrupt them in a hurry.


What happens then in 2025, when they are estimating 20% of Canada's population are old and non productive seniors,that just draw from the social benefits gov't pools. 

If we project Canada's current population of around 30 million to 2025 (10 years from now), and
add another 3-5 million in population increase, that's about 6 to 7 million of oldsters over 65 at that point,
a significant burden an drain on the working population.


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## HaroldCrump (Jun 10, 2009)

Nothing will happen, carver.
Govt. will keep saying inflation is 1.2% and that is what your OAS and CPP will go up by.

In the meantime, milk will cost $100 a gallon, a loaf of bread will cost $50, and gasoline will cost $10 a liter.
But yeah, inflation will still be 1.2% because riff raffs like us do not understand the highly scientific and sophisticated way in which it is calculated :rolleyes2:

As for who pays...the remaining workers will be left with less than 1/3rd of their gross income at the end of the month.
But the govt. will say taxes have not gone up.
Taxes have in fact come down.
You see, the new user fees and taxes were revenue neutral.
And these are not taxes...these are simply premiums for better services.

So quit whining, keep working hard from 18 to 78, shut up and keep paying your taxes.


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## fraser (May 15, 2010)

In the last 10 days or so we have ordered on line from Costco, Hp, and Indigo. Price, convenience, and selection.

Amazon ran a promo in the US. If you sent them a selfie with you in a book store with the book in hand, and subsequently ordered that same book on line, they would give you an additional $10. discount on that book. 

The stats in the UK are incredible. Stores don't give big discounts or sales, petrol is expensive. People are moving to on line for the same reasons-price, convenience, and selection.

I cannot remember the last time we walked into, or used a retail bricks and mortar travel agent.


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## peterk (May 16, 2010)

As far as I'm concerned the only reason I don't buy everything online is that picking up a shipped item is a challenge of mind boggling proportions! I swear whatever shipping company changes their home delivery times to 3pm-11pm will instantly dominate the parcel shipping market (why has no one done this exactly?)

You can expect brick and mortar retail to drop further as all the 30-50 year old money earners who grew up with shopping begin to retire, replaced by today's teens who have never known a world without LTE internet on their phones and Amazon Prime.


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## carverman (Nov 8, 2010)

HaroldCrump said:


> Nothing will happen, carver.
> Govt. will keep saying inflation is 1.2% and that is what your OAS and CPP will go up by.
> In the meantime, milk will cost $100 a gallon, a loaf of bread will cost $50.


I thought milk and bread were staples..no pun intended) and the gov't somehow regulates the prices on milk, eggs and bread.
otherwise how will the poor children on welfare be fed at affordable food prices? It's bad enough already with ads showing the kids going to school hungry and if you donate some money, at least one kid will be fed for a month or something like that.

Gasoline will cost $10 a liter? Somehow, I can't imagine it that high in 10 years, but I do remember in the 70s, when it was about 25c a litre. There was only a provincial road tax on it then..now over half of the cost of a litre of gas is taxes, taxes and taxes. As the price of fuel goes up, so will everything that depends on trucking to get into the stores. Even on line distribution still requires goods to be trucked to the buyer. As it becomes more and more expensive for brick and mortar stores to continue,,,rent, business taxes, local taxes, electricity costs, employee salaries, and other brick and mortar related expenses, many unprofitable stores will drop out. 

That means fewer jobs in the retail industry. True though, that some consumer items like shoes, clothes and other paraphernalia have to be tried on in stores to make sure it fits, but most consumer goods will
be ordered on line and delivered to your door. 

Remember the huge catalogue empire Simpsons-Sears and Eatons back in the 60s and 70s that was phased out?
now we have a re-emergence of that again..but without the paper printing costs and delivery.



> But yeah, inflation will still be 1.2% because riff raffs like us do not understand the highly scientific and sophisticated way in which it is calculated :rolleyes2:


Inflation according to the gov't is measured only on certain staples..like milk and bread..they don't sample other consumer goods because it would blow their calculations out of proportion and scare the public....just take your vehicle into a garage to get analysed or repaired at practically $100 an hour + taxes...or the repair cost with parts that can cost hundreds of dollars or even thousands....
and in a few years, the vehicle is scrapped and it starts all over again but a higher cost.



> As for who pays...the remaining workers will be left with less than 1/3rd of their gross income at the end of the month.
> But the govt. will say taxes have not gone up.


Taxes are inflationary..we have seen a lot of this in Ontario, and about to experience a lot more in the next 4 years.



> Taxes have in fact come down. You see, the new user fees and taxes were revenue neutral.
> And these are not taxes...these are simply premiums for better services.


User fees are here to stay..users have to pay more..why should I pay for someone else out of my taxes?


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## fraser (May 15, 2010)

My son is 29. He buys many, many things on line. Busy life. My daughter is 27. She has been the Queen of Internet Shopping since she was 20. Now that she is living in Ft. Mac, her and her SO do most of their non perishable shopping on the web.

We are in our early sixties and live in an large urban city. We have purchased our travel on line for years. Now, when we need something other than clothing or perishables, we start with on line shopping. We can 'shop' when we want, where we want. Why would we pay $60. for a two books when we can pay $25-30 and have them delivered to our house or, in the case of Indigo, to our local Chapters store. With few exceptions, all of our banking and bill receipt and bill payments are completed on line. So why not shopping.

Same with our pubic library which we use extensively. We search the stacks on line and simply order up the book or DVD to our local branch.

It is no wonder many organizations are cutting back on retail space. I think this is exactly what is driving the change at Chapters. They are carrying many more non traditional bookstore items-many of which are impulse items. They need to boost retail sales per sq. foot in order to survive. Either through reducing the store footprint or by diversifying their offerings. One store near us just cut it's floor plate by about forty percent.....a TD bank office is taking over the space once renovations are complete.


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## brad (May 22, 2009)

While I do buy a lot of things online, I still love going to small shops and building up a relationship with the owners and other people who work there. I think there'll always be a niche for small, local shops, even local bookstores. Some books (art books, especially) don't really work as ebooks, and I also find that after working on a computer all day the last thing I want to do is look at another screen. I was into ebooks for a while but I've drifted happily back to paper; I use ebooks mainly for reading while traveling or for reference.

Face-to-face interaction with other human beings is always going to be important, especially today where so many people interact with each other online.


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## cainvest (May 1, 2013)

Online is only going to grow while brick and mortar only stores will likely continue to suffer. The distribution system for online will likely get better over time potentialy making things even cheaper. 

I have come across one contradiction recently, where some B&M stores with an online side are actually selling the item cheaper in-store than online.


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## fatcat (Nov 11, 2009)

i own first capital realty and occasionally think about dumping them because i am concerned about retail, though fcr has been doing fine as of late

i recently had a lot of dealings with sears because i bought a very good frig, a kenmore which has been excellent and well worth the $1200

but every other aspect of their business is subpar, merchandise selection is awful, really awful, delivery is awful, their credit card services are bad , their online operation is bad

they offered me a master-card and a bunch of points when i bought the frig blah blah, i never go for that stuff but i did this time

i am going to cancel the card soon and i have like $140 on a gift card which i intend to spend soon because unless they change FAST, good old sears of my childhood is creamed-retail-on-toast ....

i thought about writing the ceo and suggesting that they turn themselves into an appliance and tools store, two things which they do very well, but i am pretty sure he will take that as an insult

which of course it is somewhat meant to be


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## Toronto.gal (Jan 8, 2010)

brad said:


> 1. Some people don't like buying clothes or shoes online; *they want to try them on first.*
> 2. hate shopping in stores....


*1.* Indeed, and I'm one of them.  
*2.* I don't mind small stores, but I dislike big shopping malls; not only are they time consuming but they give me headaches [literally].


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## brad (May 22, 2009)

fatcat said:


> i recently had a lot of dealings with sears because i bought a very good frig, a kenmore which has been excellent and well worth the $1200
> 
> but every other aspect of their business is subpar, merchandise selection is awful, really awful, delivery is awful, their credit card services are bad , their online operation is bad


I totally agree with this. I only buy appliances and tools from Sears; everything else I've tried has been a disaster. We made the big mistake of ordering a desk and bookcase, which looked good in the catalogue but turned out to be cheap fiberboard covered with some sort of plastic imitation wood veneer; assembling the desk took 6 hours and two of the drawers don't close properly. It was like a bad Ikea experience multiplied by 16.


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## carverman (Nov 8, 2010)

brad said:


> I totally agree with this. I only buy appliances and tools from Sears; everything else I've tried has been a disaster. We made the big mistake of ordering a desk and bookcase, which looked good in the catalogue but *turned out to be ...
> cheap fiberboard covered with some sort of plastic imitation wood veneer; assembling the desk took 6 hours and two of the drawers don't close properly. It was like a bad Ikea experience multiplied by 16*.


Lol! and I thought that cheap "cr*p you get from Ikea and struggle with assembly was unique to Ikea.

Knockdown furniture is very popular with most retailers (saves on warehouse space) ..Most of it made from
recycled cardboard (MDF). 

Years ago you could actually get pressboard with REAL SAWDUST in it, now it's mostly MDF and falls
apart real easy especially around the fasteners. Had friend buy some shelving cases at Ikea, and it turned out to be a couple inches too high for his low ceiling apartment..had to cut it down..dust coming off those shelves was unreal.


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## cainvest (May 1, 2013)

fatcat said:


> i recently had a lot of dealings with sears because i bought a very good frig, a kenmore which has been excellent and well worth the $1200


I've had good luck with the Kenmore brand in the past but of course they don't make their own stuff, they rebrand off the major suppliers usually just adding small cosmetic changes.


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## fraser (May 15, 2010)

I think that there is a HUGE win to be had for retail outlets with web sites. Allow people to purchase on line, and return or pick up, at the local store. We can buy on line and return to a Chapters store if necessary (or even pick it up there). We can buy on line from Costco and return it to a store. Likewise with stores such as Softmoc and I think also BestBuy/Future Shop.


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## fatcat (Nov 11, 2009)

cainvest said:


> I've had good luck with the Kenmore brand in the past but of course they don't make their own stuff, they rebrand off the major suppliers usually just adding small cosmetic changes.


true, i think one factory makes like 5 or 6 of the biggest brands nevertheless, the kenmore brand still has a lot of life in it


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## sags (May 15, 2010)

They can all transition to online.........but it remains to be seen if their efforts will offset high consumer debt problems.

The government is warning........the banks are warning.........the credit agencies are warning.

Maybe they know tough times are ahead.........and retailers are the first indicators of trouble.


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## m3s (Apr 3, 2010)

peterk said:


> As far as I'm concerned the only reason I don't buy everything online is that picking up a shipped item is a challenge of mind boggling proportions! I swear whatever shipping company changes their home delivery times to 3pm-11pm will instantly dominate the parcel shipping market (why has no one done this exactly?)


Other countries have electronic mail boxes at parking lots or common places. You get an email/app notification with a code and you pick it up on your way home etc. Too easy, and much more efficient than having a truck attempt 3 door deliveries for no reason, and then having to drive to some depot outside of town. Amazon is working on drone delivery though..



fraser said:


> I think that there is a HUGE win to be had for retail outlets with web sites. Allow people to purchase on line, and return or pick up, at the local store. We can buy on line and return to a Chapters store if necessary (or even pick it up there). We can buy on line from Costco and return it to a store. Likewise with stores such as Softmoc and I think also BestBuy/Future Shop.


The good websites today are shipping with return labels included. You can get an RMA online no problem. My gf regularly buys clothes online, tries them on (in the comfort of home) and then throws them back into the package.. I've been shopping online since the 90's and I've never had an issue returning things. Shipping should take less time/effort/fuel than returning to a store.

I can get FAR better quality items online than in local stores. The big box stores with their own brands/models are actually watered down versions intent on maximizing profits. I've dealt with many family and niche businesses over the years who actually take pride in selling the best product they can backed by longer warranties at an affordable price thanks to the internet.


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## fraser (May 15, 2010)

This is exactly what my daughter has been telling us for the past 7 years. To the point where my spouse is now starting to order clothes on line.


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## andrewf (Mar 1, 2010)

Mode, that returns model may only work for high margin goods. Many retailers are struggling with very high costs of processing returns.

Ecommerce has been very slow to take off in Canada. It seems to be picking up now, but the economics still seems to favour some bricks and mortar presence for click and collect and returns.


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## m3s (Apr 3, 2010)

andrewf said:


> Mode, that returns model may only work for high margin goods. Many retailers are struggling with very high costs of processing returns.


They must be selling junk products? Maybe banking that most are too lazy/busy/forgetful etc? My rate of return is very low and I don't abuse it like some people seem to do. For the clothes my gf is ordering, they seem to have warehouses located all over the place (very short efficient delivery model) She has also sold clothes online for years. She calls it importing. There seems to be a bottomless addicted market for it, and the odd trouble customer, but mostly she enjoys it


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## carverman (Nov 8, 2010)

fatcat said:


> true, i think one factory makes like 5 or 6 of the biggest brands nevertheless, the kenmore brand still has a lot of life in it


LG makes the Kenmore brand...and overseas at that!




> The Whirlpool Corporation, based in Benton Harbor, Mich., makes Whirlpool, KitchenAid, and Gladiator products. The company accounts for about 17 percent of major appliance sales in the U.S., following closely behind the General Electric brand (17.8 percent) and the Sears Kenmore brand (22.2 percent). Over the years, the *Whirlpool company has gobbled up Admiral, Amana, Jenn-Air, Magic Chef, and Maytag, .
> It makes appliances for Ikea (ovens, ranges, cooktops, microwaves, refrigerators, freezers, and dishwashers)*
> and also Kenmore, (some of the brand’s refrigerators, dishwashers, washers, and dryers).
> Gladiator and KitchenAid are two “Whirlpool bred” brands. *Whirlpool’s certainly not the only Kenmore supplier. Frigidaire and LG also manufacture Kenmore refrigerators,* Haier handles some of its compact fridges, and Danby makes some of its wine chillers, Bosch makes some of its dishwashers, and Electrolux and Sanyo build some of its freezers.
> ...


A neighbour of mine bought a kenmore washer..stopped working after 1 year. Called Sears service, they estimated
the cost of the circuit board to be half of the cost of the washer + service call. While working on the washer,
the serviced tech unplugged the freezer, but forgot to plug it back in...spoiled about $400 worth of meat. 
Sears Service refused to compensate them for spoiled food,but refunded the ineffective service call. 
They decided not to repair washer and bought a Bosch washer instead. 

Sears service was going out of business. last I heard.


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## cashinstinct (Apr 4, 2009)

+1 on the shipping at home issues.

When they leave you a stupid paper and you must drive around half the city to their stupid warehouse to pickup junk (looking at you UPS).

Mailing service at work does not want to handle personal orders, so I need to ship at home...


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## m3s (Apr 3, 2010)




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## Nemo2 (Mar 1, 2012)

^ :biggrin:

(Hold on....why am I laughing...we're currently awaiting a package via UPS.)


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## andrewf (Mar 1, 2010)

m3s said:


> They must be selling junk products? Maybe banking that most are too lazy/busy/forgetful etc? My rate of return is very low and I don't abuse it like some people seem to do. For the clothes my gf is ordering, they seem to have warehouses located all over the place (very short efficient delivery model) She has also sold clothes online for years. She calls it importing. There seems to be a bottomless addicted market for it, and the odd trouble customer, but mostly she enjoys it


It's a problem mostly for clothing and shoes. There are customers who might order ten pairs and return eight or nine. Either black list this small group or change returns policy.


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## donald (Apr 18, 2011)

So basically get long fed-ex?


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