Last week, we unfortunately learned that Target, the American Superstore, had decided to close its 133 Canadian retail locations, sending some 17,000 people to unemployment.
Here in Cornwall, it meant the closure of the Target distribution centre, managed by Eleven Points Logistics, costing 350 jobs to the area.
The same day, Sony announced they were pulling out of the Canadian marketplace, closing their 14 stores. Clothing retailer Mexx also followed suit, vouching to close its 95 locations nationwide by the end of February. But these are only the latest few.
The last quarter of 2014 has seen big names such as Sears, Smart Set, Jacob and Holt Renfrew also pull out of our wonderful country. This left me pondering. What is going on? What is it that makes Canadian Retail such a doomed venture?
One theory puts the blame on managers rather than consumers. Do Americans and other foreign investors expect the Canadian Market to be so different from their American counterpart, leading them to setting prices higher, quality lower and selection fewer? My guess is yes, but there is probably a myriad of other factors to consider.
Many are speculating that the world is on the verge of a global recession like never seen before. For the last while, the central banks have had to be creative in order to maintain a volatile economy and tame the “deflation dragon”. Because of the oil’s epic decline in pricing, the beast has awaken once again.
The Bank of Canada is keeping a close eye on the situation.
Some may think we will see, in the near future, a decrease in the cost of imported goods as a direct result of lower gas prices, but I’m skeptical. I don’t think the consumer will be the ultimate beneficiary. Exporter will likely be the ones lining their pockets with more money. After all, we, the customers, are already used to paying a certain amount for our imports. Why change?
Let me ask you this… How do YOU feel about the fall of gas prices? Are you still cautious or did you decide to go and invest a whole bunch of money into a new big purchase as a direct result of gas being cheaper? Do you feel that you have more money in your pockets? And how are you feeling about the future? Do you think, like me, that big companies might have some insider information that the little guy doesn’t have, which would have led them to pull out of the Canadian Market?
“…Banking establishments are more dangerous than standing armies. If the American people ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied.” –Thomas Jefferson