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#Written by David Tam, 1999.           #       
#davidkftam@netscape.net Copyright 1999#  
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From tamda@ecf.toronto.edu Mon Jul 12 18:22:48 1999
Date: Tue, 26 Jan 1999 15:36:42 -0500 (EST)
From: David Kar Fai Tam <tamda@ecf.toronto.edu>
To: APS 424S <aps424@chem-eng.toronto.edu>
Subject: #8-01/27/99-"Car sales boost retailing"


The Globe and Mail, Saturday, January 23, 1999. B3.

    This article reports that retail sales in Canada had 
increased by 1.1 % to $20.8-billion in November from October. 
This was due mainly to increased sales in automobiles. However, 
if automobile sales were excluded, the increase would only be 0.3 
%. Industry analysts are warning of tough times for retailers. 
Other adverse factors include the fact that household finances 
remained strained, disponsible income was fairly weak, and 
financial markets volatile.

    Canadian retail businesses must find new ways of keeping 
their businesses afloat.  Appropriate expense cutting mixed with 
an appropriate marketing plan can help Canadian retailers weather 
the upcoming drought. Fundamental shifts in strategies may be 
required.  For instance, Eaton's Co. is currently under-going 
such changes while being carefully scrutinized by the business 
community at large. A better off retailer such as Sears Canada 
has implemented several strategies such as the creation of 
exclusive home furniture outlets, online catalogues, renovation 
of existing outlets, and refusal to participate in prices wars 
that have affected Eaton's and the Bay. Sear's strategy and 
strong management staff have led to very positive financial 
results.

    The statistics and analysis presented in this article are a 
bit confusing. I would have thought that the boast of automobile 
sales is a pretty good indicator of the general economic 
direction. Indicators such as construction related stats usually 
have this property. I would have thought that the boast of 
automobile sales meant that the economy was in a very good 
position. Canadians would need a high level of disposable income 
to purchase new automobiles, and their outlooks would need to be 
very rosy. Otherwise they would hesistate on the expensive 
purchase. To sustain such a buying pattern would require a strong 
economy with low interest rates, high disposable income, and low 
unemployment. Perhaps the 0.3 % component which is non-automobile 
is experiencing a delayed increase due to a yet to be considered 
factor. Perhaps the numbers will be most accurate in a couple 
months once the delay was been attenuated.