Tough Retail Life in Canada

Lately it’s been a rough ride for retailers in Canada. Just by listening to the media it feels like there is a new chain of store closing every day. The names Future Shop (rebranded Best Buy), Target Canada, Bikini Village, Parasuco, Areopostale, Jacob, Smart Set, Mexx, Zellers have disappeared, are disappearing or restructuring with the hope to have a 2nd life (or 3rd or 4th depending on the retailer). I would even add Sears Canada to the list since it’s just a zombie store (I think somebody forgot to turn off the lights). Some of the names above will be gone of the scenery for good and others will be a thing of the past. Regarding Sears, I have a great shopping tip during the holiday season; park your car at Sears, it’s the only parking lot with space available and use their store entrance to get in the mall. That strategy has worked for me for at least ten years and counting. There’s seems to be an endless list of reasons to lay the blame on. A weak dollar, high rent, the economy, the minimum wage on the rise, intense competition, lack of parking etc…without a doubt it’s an extremely difficult to be in retail. But one reason not cited is that nobody seems to blame the failure at them. Of course the reasons cited above are huge issues to overcome and I’m not trying to minimize their effect. However successful businesses know how to navigate a tough environment. There are other retailers facing the same problems and they are doing just fine. Stores like H&M, Zara, Forever 21, American Eagle, Mango, the Apple Store comes to mind. Do you think Target Canada failed because of the minimum wage or the lack of parking. No it failed because it was a terribly run business. Jacob failed because they didn’t adapt to change in customer’s taste. If you don’t provide what the customers want you will be in trouble. These stores are responsible for their own failure.The economy is not shrinking either. In 2014, according to Stat Canada and le Conseil Québécois du Commerce de Détail, sales excluding car, gas, and food are up 3.8% in Quebec and 4.6% in Canada. Consumer spending seems to exceed GDP growth. The number suggests that Canadians are spending and consuming more. They are simply not spending their money at the stores mentioned in the first paragraph. A guy I know opened a restaurant in downtown Montreal. I went once to check it out and it was mediocre. The place was huge and empty, it felt cold instead of cozy and comfortable, the lighting wasn’t good, service was ok, and the food was average (they actually burned my wife’s pizza but made a new one). I had the feeling that he won’t be in business very long. My wife wasn’t impressed. I couldn’t recommended it to anyone. Indeed, the restaurant survived six months with a couple months behind on rent. He told me that it was the city’s fault for his failure. He said “The city doesn’t do enough to bring people downtown and parking is expensive.” Of course I agree with these reasons but the number one reason for the restaurant failure was his own. The street he was on is packed with restaurants, some with lines outside. If you depend on the city for your success, you’re in for a long ride. The bottom line is he didn’t do enough to bring people in his restaurant. But again instead of taking responsibility and learn from his errors, it’s easier to lay the blame on other things.


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