future retail

FUTURE RETAIL

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note: I couldn't help myself, I had to go back and buy more totes and bags of wheat.  Not that I probably need them, but I couldn't stop the dialog in my head ( get more!  Famine ahead!  Don't be a dumbass, economic collapse ahead-keep your savings! ).  I compromised by just getting one more year worth.  A correction from the comment I made.  Each 18 gallon tote ( $5 ) only holds two 50lb pounds of wheat, not three ( left in bag-remember, only in a storage area your cat controls mice.  These are thin totes, not thick buckets ).  And, my luck, three days later the bags already increased 10% to $11.  New calculations for a years worth of wheat is $108.
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note: JRG of TX, got your mail, yours is on the way.
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note: continuing the discussion from the other day, a minion who whittles and carves hours a day highly recommends the Douk-Douk knives ( http://amzn.to/2gRAsEj ) or the Opinel knives ( http://amzn.to/2gPzQ1V ).
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What does the retail sector look like in the near future ( prior to collapse )?  It would be easy to speculate that it will be a lot like it was fifty years ago, but I have my doubts.  Remember back to your childhood?  There were no big box stores, everything was Mom & Pop.  Nothing was cheap, but nothing was crap, either.  There were few frivolous luxury stores and more utilitarian ones.  And mail order was how you got discount or specialty items.  Does any of that sound like something we can repeat or duplicate?

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None of this should be difficult to figure out-all the changes were in the last twenty-five years, after globalization and Chinese manufacturing.  It was all established during the last Oil Gush ( and last of its kind.  Fracking doesn‘t count, which should be obvious from the two economies in comparison ), featuring Siberian oil and Kuwaiti control.  As much as we all love to hate Clinton, at least he was smart enough to stay out of the way of the prosperity at the ass end of oil affluence.  Already under Shrub the party was over, but opening the credit spigot actually worked that time to kick the can.

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Nothing is the same as it was.  There is no longer abundant cheap to produce oil.  Shipping costs are no longer Too Cheap To Meter ( as the old nuclear power promise laughingly asserted ) and all raw materials are running out as we strip mined the diffuse ores with extra applications of petroleum ( just as we have done with our soils for food ).  With the credit system from the central bank in disarray it is hard to start a business and impossible to stock inventory.  So the new normal box store stocked with Chinese crap is in big trouble ( and remember, now that Job Retraining is hardly ever applicable, retail was the last chance of employment for many folks ).

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But mail order ( whether it be Sears By Train or Amazon by UPS ) is also in trouble.  It is far less efficient to ship to every household than it is to ship to a centralized store.  Wal-Mart and Home Despot offering free shipping to their store might be a temporary fix, but it is being used to further decrease inventory ( as JIT once did ) and does less good than harm.  When trucks rolled into stores daily, the extra items shipped and the JIT inventory was less wasteful.  Now that trucks are more intermittent, to save money, the order of the day is rolling inventory shortages, leading people to mail order, leading to further energy wastage.

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Mom & Pop stores still struggle to this day, for good reason.  They are far too expensive due to lack of volume.  With the bankers number one profit center being rents, the costs of even  opening a retail business are getting even higher.  Not to mention the credit issue.  The businesses that do prosper, the Pakistani opening a liquor store, for instance, operate in high crime low rent areas, have zero employee costs and charge high prices.  That isn’t a very good template for regular retail. 

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One thing we can be sure on is the high rate of failures ahead, as the retail landscape is in severe oversupply.  There is a LOT of fat to trim and little hope of the economic recovery needed to free money back into consumers pockets.  We are already at the point of the Great Depression when no one had jobs to buy the products those with jobs made.  What?  You thought everyone could afford a $1200 a month health insurance premiums and still be able to shop at the mall?  So, an ever shrinking retail space landscape, little hope of mom and pop’s replacing them, the inevitable shrinking fuel availability for Amazon-like individual delivery.  Where does that leave the consumer?

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Remember, in a contracting system, new infrastructure doesn’t get built.  However inefficient the old system is, that is what gets used.  The question is, how?  Forget mail order, other than specialty items for the affluent.  Forget Amazon.  Individual point shipping is a future dead industry, given fuel contraction.  As the trucking industry contracts, less overall loads mean fewer loads to fewer outlets.  Wal-Mart won’t be a survivor.  As spending contracts, volume sales of inferior quality will also be a dead industry ( plus, their costs are way too high ). 

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I think a big winner will be grocery stores.  Not as many competitors as now.  But those that survive on low costs rather than boutique convenience items sold to a shrinking middle class, and expand their offerings.  If you notice the typical grocery store, they have huge amounts of wasted space.  All the convenience food items such as the deli and bakery and butcher can be eliminated, replaced with pre-packaged.  A lot of their shelf space is expanded with less selling items ( and seasonal overprices bric-a-brac crap ).  It wouldn’t be impossible to turn existing grocery stores into a mini-Wal- Mart, selling a lot of daily needed items too heavy to ship to homes and too specialized to be supported in its own store ( such as, to a degree, paint for instance.  If it was just white, no colors ).

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Specific colored paint needing its own store?  Or huge sections  of a general store?  Or extra needed labor?  These kinds of luxuries are what is going to see contractions.  Home improvement stores?  Serving home owners and those with credit trying to flip homes.  As we move towards greater rentals and less home ownership, you’ll probably see Lowe’s and Home Despot fail before Ace Hardware and the local lumber company.  Why couldn’t your new grocery store turned into a general store offering Free Shipping To The Store on a lot of items?

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All this is wild conjecture of course.  Trying to follow the failings of the future economy on little more than oil production contraction.  This factors OUT a lot of variables such as the petrodollar, inflation, supply availability, unemployment on a broader scale and etc.  Yet, isn’t it close enough, at least to think to yourself to mostly stock up on everyday items now, before shortages and price hikes?

END ( today's related link http://amzn.to/2yPaMlG )

 

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