The Value Added Tax (VAT) is set to increase in UK from 17.5% to 20% as of January 4. The increase in tax is likely to induce higher demand for retail because consumers will try to beta the tax by purchasing before January 4. This bodes well for retailers, at least in the short run.
While the print and electronic media remains infatuated with the latest gadgetry, predicting higher electronic sales every December, this year is likely to be different. There has been a significant decline in the searches conducted on Google by shoppers in Canada. It is hard to tell the magnitude of reduction in the sales of electronics during this Christmas. However, chances are that the overall electronic sales in Canada may experience a decline in Christmas sales.
The electronics retailing in Canada is more of a pseudo competition between the two leading retailers, Best Buy and the Future Shop (also owned by Best Buy Canada). The latest Internet searches by the shoppers in Canada suggest that Best Buy has taken over Future Shop in popularity. In 2008 and 2009, Future Shop lead Best Buy in Canada amongst shoppers’ searches on the Internet. In 2010, Best Buy has left Future Shop behind.
| December 2008 | December 2009 | Nov-Dec 2010 |
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Also worth noting is the return of The Bay in the top 10 shopping searches in Canada. In the past, Bay has been bleeding as low-cost retailers had taken significant market share away from Canada’s flagship retailer. Also listed is Amazon amongst the top rising searches for 2010 and not Indigo/Chapters. This suggests that online book retailing is still a forte of Amazon, even in Canada.
Further evidence to my above-mentioned assertion is found the actual sales data (as shown in the graph below as seasonally adjusted monthly retail sales) which shows that sales of electronics and appliance stores (red colour line) and furniture and home furnishing stores took a tumble during recession in 2008 and that electronics sales have not recovered to the peak observed in mid-2008.
Sales at general merchandise stores (depicted as green line), on the other hand, suggest almost no impact of the recession. The upward trend in sales for such stores has continued unabated since 1996. Furthermore, the gap between the sales volume of general merchandise trade and the sales of electronics and furniture stores has continued to widen, despite the hyped media coverage of bumper sales of uber gadgets.
Image by Getty Images via @daylife
When I started researching the supply chains, every textbook had at least one case study on Dell computers and another on Toyota. The praise for Dell never ceased; how it had eliminated the inventory and the entire assembly was now just-in-time.
At the time those books were written Dell was the biggest computer maker. Since then the global landscape of the technology companies have changed. Dell is no longer at the top of the computer assembler totem pole. Other interesting developments of the recent past include Apple overtaking Microsoft in market cap and Google trading over $500.
Can you imagine what the next editions of books on supply Chain would contain: the praise for smart mergers and how HP and Compaq made their marriage work by streamlining their supply chains …
A 5-year to date comparison between HPQ and Dell suggests that while HPQ stock would have climbed 89%, Dell would have put you in red at –67.35%. Of course, sticking out with Apple would have returned a 500%-plus gain in stock value.
There are times you wish you had an assistant to provide you with the facts and data as you are busy writing your blog. Zemanta offers a tentative solution. While you write your blog, it tries to provide you with the background material.
Let’s take Zemanta for a test drive. I would like this blog about the rising debt levels amongst Canadians. A recent Bloomberg story highlighted the fact that Canadians are getting more and more into debt. That is the ratio of debt to disposable income for households have been on the rise. If these trends continue, Canadian households are likely to pullback spending in the months to come.
The household debt has been rising in the US as well. See the image below that suggests that the household debt in the US has peaked.
According to an entry on Flickr:
On December 10th, the Federal Reserve released its latest l
atest findings on Consumer Debt Outstanding. In reflection of good personal choices, personal debt went down by 2.6% for the third quarter 2009. This is amazing because it brings the total personal national debt down to around $13.6 trillion. Also, for the first time ever, personal debt did not grow for the fifth quarter in a row. This decrease was due to a 13.6% drop in household home mortgage debt AND a 3.2% drop in consumer credit.
Image by eric731 via Flickr
How did I get this image? Zemanta suggested it.
What about other related stories and information. According to Windsor Star, Canada’s household debt has reached $1.4 trillion. I didn’t search for this. Zemanta suggested it. By the way notice the 10% rule. If the US households are carrying $14 trillion in household debt, their Canadian counterparts would carry 10% of the US amount.
Another story in Toronto Star on May 11 refers to the fact that Canadian households are the most indebted people living in the advanced countries, according to OECD.
How do I know this? Zemanta suggested it.
Lastly, the Bank of Canada's governor offered the following comment on household debt in Canada in a Reuters' story:
"We don't expect a sharp uptick in household savings in Canada. Again, that is one of the risks to the projection that there could be a repair of household balance sheets, or an increase, I should say, in household savings in Canada. All of that said... household balance sheets in Canada are in quite strong shape and that is one of the big differences between Canada and the United States."
Who searched this item for me? Zemanta did.
