Why is it that brick and mortar retailers are unable to remain profitable? Well, there are many reasons, one has to do with increased costs of employees due to ObamaCare, but that is just another fire hose in the bucket – increased regulations too has taken its toll and the biggie, of course, is the growth with Online Retailers. How did things get so bad? Well, in their race for profits, these name-brand big retailers started selling us inferior Chinese Made products, dressing them up nicely with well-done marketing.
As I started to write this article, I was interrupted by life-events several times; Christmas, Family, New Years, California Storms, Yard Work, Etc. and each time I put it off to another day, there was yet another unfortunate story in the news; Bloomberg Business News, CNBC, Wall Street Journal, or the NYTs, LA Times or Washington Post Business Section, of yet another downsizing, right-sizing, or bankruptcy in the retail sector – stores closing, vendors hosed, employee layoffs – it’s not looking too good, unless you are an online retailer. Let’s talk shall we?
Why did that strategy fail? It didn’t at first, but if these retailers are going to sell us cheap imported goods then people are going to shop for price, and once consumers start doing that, Sears, Macy’s and other big box retailers can’t compete due to their higher cost structure, and Jeff Bezos of Amazon, well, he takes no prisoners; “no mercy expected, none given,” motif.
There were a couple of interesting articles, one in Total Retail on or about the first week of 2017. The first was titled; “Sears to Close 150 More Stores, Sells Craftsman Brand,” and the second one was in the Wall Street Journal “Macy’s and Kohl’s Are Hit by Weak Holiday Sales – Macy’s to cut more than 10,000 jobs, close stores; Kohl’s lowers profit targets.”
On January 6, 2017 the Washington Post had an article titled; “The Limited is closing all of its 250 stores” written by Sarah Halzack. There is an interesting video on YouTube titled; “MUST WATCH! 10-reasons why world economy collapse in 2017 – NEW,” which stated that Sam’s Club was also closing many less-than-optimal stores, again 10,000 job cuts there.
Suffice it to say, retail isn’t working, those old business models are not going to be viable in the future, they just cannot compete with the efficiency of online retailing, no way, no how, so now what? Well, they say the only constant is change, but how much near-term change can our economy take? Sure, those are not great jobs, and most are now only part-time, but those job losses are real and really affect real lives. Please consider all this, and don’t hesitate – be great.