Monday, February 3, 2014

Squeezing The Middle

This morning I read a NY Times article that claimed that the retail space was collapsing in the middle, leaving only premium or bargain-basement retailers.

The same thing is happening in Canada, and especially in Toronto.  Some people don't like to admit it, but there's a huge squeeze on any business who generates revenue from the middle class.

Just look at HBC or Sears; they're being replaced on the high street because people are betting they can get more money per sq/ft selling to the top 20% of earners, rather than the bottom 80%. So, we are getting Saks where HBC was and Nordstrom where Sears was.

Looking at the USA where Walmart is warning that cutting back on food stamps will hurt the corporate bottom line at the same time as it's staff is also often reliant on government assistance, you have to question what is going on?

It's long been an adage that the rich are getting richer whilst the poor get poorer, but you have to ask who in charge here is fixing this?

It's becoming increasingly obvious where the ripple effects are coming from and going to, but nobody is going to those sources.  For instance, are Toronto city planners happy that a second area is about to vie for the wealth of the top 20% whilst ignoring the purchasing power of the majority?

If allowed to continue, these ripples will continue to divide and flow into further auxiliary businesses.  That's going to force them to also go cheap or go expensive.  This forces the division in wages to get larger and thus the cycle will propagate.

It's not looking good for Toronto.  As I mentioned earlier, you have to question what is going on...  There's only two options:

1) Nobody is in control here, so we have a bad situation for the majority.
2) Someone is in control here, and this is apparently what they've decided is right.