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The American Model Of "growth": Overbuilding And Poaching

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Great article on what is purported as growth and the driver - cheap QE money. We have the same here - prevalence of pound shops and retail spin.

BTW last of Tie Rack going from the high street. http://metro.co.uk/2013/11/19/tie-rack-joins-the-high-street-exodus-as-shoppers-buy-online-4192869/ 450 shops to zero.

The American Model of "Growth": Overbuilding and Poaching

http://www.oftwominds.com/blognov13/growth11-13.html

The American Model of "Growth": Overbuilding and Poaching (November 19, 2013)

Why has this doomed model of overbuilding and poaching sales become so dominant? Look no farther than the cheap-money policies of the Federal Reserve.

The rising Gross Domestic Product (GDP) and other simulacra of "growth" are masking the real model of growth in America: overbuilding and poaching, as in poaching customers and sales from competitors.

No matter how many outlets a company has, there's always room for a few hundred more somewhere. Now that there's a Starbucks on every corner, you might think the opportunities for expansion are limited. No way--now there are Starbucks in bookstores, Safeway supermarkets, subway stations (BART), etc.

Not only is there a coffee outlet of some sort everywhere you look (hey, how about a Starbucks in every Home Depot?), Starbucks is getting into everybody else's business as well--even occasionally hawking music CDs, for example, at least until CD sales plummeted to the point it wasn't worth poaching the declining sales.

Dollar stores are proliferating at a phenomenal rate, as are drug stores in various sizes and iterations--all aimed at poaching customers from WalMart and Target. There is a certain irony in this, as WalMart and Target expanded rapidly by poaching customers from the entire spectrum of retail competitors--supermarkets, department stores, drug stores, sporting goods, and so on.

Everybody's getting into everybody else's business. If there is a profit to be made, suddenly every gas station mini-mart is stocking the line of goods, as are dollar stores and drug stores coast-to-coast.

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Great article on what is purported as growth and the driver - cheap QE money. We have the same here - prevalence of pound shops and retail spin.

BTW last of Tie Rack going from the high street. http://metro.co.uk/2013/11/19/tie-rack-joins-the-high-street-exodus-as-shoppers-buy-online-4192869/ 450 shops to zero.

The American Model of "Growth": Overbuilding and Poaching

http://www.oftwominds.com/blognov13/growth11-13.html

The American Model of "Growth": Overbuilding and Poaching (November 19, 2013)

Why has this doomed model of overbuilding and poaching sales become so dominant? Look no farther than the cheap-money policies of the Federal Reserve.

The rising Gross Domestic Product (GDP) and other simulacra of "growth" are masking the real model of growth in America: overbuilding and poaching, as in poaching customers and sales from competitors.

No matter how many outlets a company has, there's always room for a few hundred more somewhere. Now that there's a Starbucks on every corner, you might think the opportunities for expansion are limited. No way--now there are Starbucks in bookstores, Safeway supermarkets, subway stations (BART), etc.

Not only is there a coffee outlet of some sort everywhere you look (hey, how about a Starbucks in every Home Depot?), Starbucks is getting into everybody else's business as well--even occasionally hawking music CDs, for example, at least until CD sales plummeted to the point it wasn't worth poaching the declining sales.

Dollar stores are proliferating at a phenomenal rate, as are drug stores in various sizes and iterations--all aimed at poaching customers from WalMart and Target. There is a certain irony in this, as WalMart and Target expanded rapidly by poaching customers from the entire spectrum of retail competitors--supermarkets, department stores, drug stores, sporting goods, and so on.

Everybody's getting into everybody else's business. If there is a profit to be made, suddenly every gas station mini-mart is stocking the line of goods, as are dollar stores and drug stores coast-to-coast.

..

...

...

..

It's a move by every retailer away from specialisation and expertise. Everyone sells everything, price is all that matters.

Goods and products are now fungible and commoditised. Everything on sale is the same the world over, you can get the same products everywhere and anywhere. Shops themselves are becoming pointless, when much can be ordered from your PC, and the shops offer products in sealed packaging and add no value when they don't know about what they are selling. If people want information, there is no expert shopkeeper to consult, so they go to the Internet for the advice.

Maybe we will all end up working for global companies, who have their own shopping mall with franchised sellers. Go to T-Mobile's HQ in Slough for example. Part of the offices are a huge atrium that the public have access to. There is a Starbucks there, as well as a newsagents, you can even drop off your dry cleaning there.

Next step, anti-truck laws are repealed. You get everything you need/want from the company store and you get paid in goods and services instead of money.

Finally, Starbucks allow concessions to sell inside Starbucks, and Tie Rack will be resurrected as a franchise. Inside every Tie Rack there will, in turn, be a tiny Starbucks.

Edited by happy_renting

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Partially agree, but price isn't the only thing that matters - the reason that this proliferation works is that the human race is growing ever increasingly more lazy. If starbucks expected you to walk 100m to their nearest store and someone opened a coffee shop closer to you they will lose sales hands down - product quality isn't sufficient differentator any more (Not that I like Starbucks coffee). Convenience is king.

God help us all.

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Finally, Starbucks allow concessions to sell inside Starbucks, and Tie Rack will be resurrected as a franchise. Inside every Tie Rack there will, in turn, be a tiny Starbucks.

No Recursive Retail! :P

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