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Bonnie Brooks

The End of the Big Box Store?

CBC has a story on the changing landscape that Best Buy and Future Shop is facing today

Brick-and-mortar outlets “have become less relevant,” he said, and as a result “the handwriting’s on the wall” when it comes to selling electronics in a big-box format.

Another factor is that electronics are being “downsized” as technology advances, making it less necessary to maintain huge stores, and cheaper for retailers to sell goods online and ship them to customers, Williams said.

While a big box is good for things like television, there really isn’t an advantage when it comes to other items.  The Source is every bit as compitive on a lot of items.  Even today I went to Best Buy and then actually found what I was looking for at The Source for a lower price.  That happens quite a bit.  It’s especially a big deal with The Source having locations all over the city.  I often find it really easy to wander in and find what I am looking for on a break or while I am out and about.

The other issue is especially with Apple products is that I can buy direct from Apple and if it is over $50, I get free shipping and I don’t have to pay tax.  I am looking at replacing my iPod with a new iPod Nano and it’s cheaper to buy direct from Apple than it is from anywhere in the city.  The same thing when I buy from MEC.  Expect others like Microsoft and even brands like Dr. Dre to do the same thing.  Even if they don’t, shopping from Amazon is so easy and with Amazon’s low margins, it’s almost the same thing for an established brand.

In the end the big box stores use the format to compete on price and if they can’t compete on price, they bring very little else to the table (unless they can create an in-store experience like Cabelas) As online retail continues to grow, look for smaller stores with better customer service, and easy access to make a comeback.  It isn’t just electronics.  Stores like Rona are asking the same questions about how easy is it to compete with Home Depot and Lowes on a large scale when they may have the supply chain efficiencies and infrastructure to do it.

The other part of the retail discussion is Sears laying off 700 people in Canada.  I wasn’t surprised.  Several times I have been the only customer I could see in a Sears store and when I walk through it I have to dodge rack after rack of discounted goods.  While The Bay has rallied around the voice and leadership of Bonnie Brooks, Sears seems to just be drifting with empty stores, an aging demographic, and no real leadership.  I can’t see them being around in five years time.

Zellers employees upset at the wrong Target

I don’t really understand this

ZellersAngela Rankin knows exactly how much Target paid Zellers for the leases to 220 stores across Canada.

It wasn’t a billion. It was $1.8-billion — $1.825-billion to be more precise.

Rankin was let go on July 28 from the Zellers at Dufferin and Dupont in Toronto after 13 years working the cash, the sales floor and as a pharmacy technician, with nothing more than the legally mandated severance pay her employers were required to give.

“It’s selfishness. It’s sad,” says Rankin, 50, a mother of one who helps support cousins in Jamaica.

“I don’t know what they’re thinking. I don’t know where their mind is. It’s greediness.”

Rankin will speak at a demonstration led by the United Food and Commercial Workers Union on Wednesday, Aug. 22, at 11 a.m., in front of Target’s Canadian headquarters in Mississauga.

“Target needs to do the right thing – keep the workers and respect their wages and benefits,” says Kevin Shimmin, national representative of the UFCW Canada,

Target posted earnings Wednesday of $704 million (U.S.), or $1.06 per share, in the period ended July 30. Overall revenue rose 3.5 per cent to $16.45 million in the quarter. Revenue at stores opened at least a year rose 3.1 per cent.

The chain will open its first stores in Canada in 2013.

First of all, Target paid HBC $1.85 billion dollars for leases, not the business.  HBC is the one that kept the $1.85 billion.  It could have given bonuses to all of it’s former employees but it didn’t.  It was used to bolster it’s bottom line and no one seems upset at them.  Secondly, Target has no legal or moral imperative to keep the salary structure, benefits or jobs of the people for the property it bought.

“It doesn’t have to be this way,” says Kendra Coulter, a professor at the Centre for Labour Studies at Brock University. “This is a decision that has been made at the corporate level by Target and Zellers and HBC.”

She blames Stephen Harper’s Conservative government for failing to protect workers.

“If a very profitable foreign company is going to come into our country to rebrand stores, our citizens deserve respect and some criteria have to be met. They’re not building infrastructure from scratch, they’re not creating an enterprise that didn’t exist, they are rebranding stores,” said Coulter.

Again, Target paid $1.85 billion dollars for that infrastructure and they are not continuing Zellers, they are doing away with them.  One thing that is lost here is that Zellers is a poorly run discount retailer that offers horrible customer service, has rather high prices, and poor quality stock.  I was in a couple during their clearance sales as they liquidated their stores and their prices were still higher than what Walmart.  In their electronics department, they were still selling Nintendo Game Cubes that were released a decade ago and discontinued back in 2007 still at full prices.  They had a 3.1 megapixel camera for sale that was over 13 years old on the shelves at over $200.  Years ago I was in Zellers looking for a jacket. They had the one that I wanted but it was behind all of these pallets of stock. I asked if there was anyway I could get the $140 jacket so I could buy it. I was told “no” it would be a couple of days before they got this stock put out. First of all who puts stock out so you can’t get to merchandise you want to sell. Secondly who says no to a customer who wants to spend money? Well, Zellers did.  I cringed when I walked through there.  Their shelves were a mess, stock was never put out in a timely fashion, and they never seemed to have anyone on the floor.   Can you blame Target for not wanting to bring that culture to the new stores?  If I was Target I would want staff who were trained the way I wanted them trained and did things the right way.

I feel bad for the employees but sometimes it happens that you work for a chain that isn’t run well and gets bought out.  If I was them, I would be more upset at Bonnie Brooks and the HBC board for selling rather than fixing your chain.  It’s them that screwed you over, not Target.