Posted on 02/01/2020 2:28:17 AM PST by Cronos
..Over seven years, Payless went through a wringer of private equity and hedge fund stewardship that left it with inadequate technology, run-down stores and no financial cushion to survive an era of upheaval in retail. .. Financial managers exert greater control over nearly all American companies than they once did.
Their willingness to cause some pain — to close factories, lay people off, renegotiate arrangements with longtime suppliers — is, many economists argue, a feature, not a bug .. The American economy has become markedly less dynamic. Fewer businesses are being started, and the newcomers are having less success unseating incumbents. Workers are less likely to change jobs, which suggests labor is not moving toward the most productive forms of work. Many major industries are becoming more concentrated among a few giants. ..Payless is now a carcass of a company, with no stores in the United States and a relative handful of employees in a headquarters that once held 800.
(Excerpt) Read more at nytimes.com ...
A big problem for brick-and-mortar retailers is that they’ve become showrooms for savvy shoppers; you could enter the store, try on shoes, then leave and order the exact pair online for less money.
Retailers understand this, and are trying to entice people with different gimmicks.
It’s not just coming, it’s here - at least in Dallas. Lots of people here I know use Instacart or similar services. I’ve had to use them myself when I was ill or recovering from a motorcycle crash and could not get out. Never had issues with the quality of what I ordered or what showed up, all as expected.
Private equity and leveraged buyout companies do sometimes kill businesses. Probably not intentionally, but they tend to extract too much cash, and take on too much debt in businesses that they may not fully understand. The result if often failure.
Running a successful business is not easy, and schemes that are designed to extract value instead of build value usually end up badly.
Yes, there are services like Instacart, DoorDash, etc....but grocery is going to take this direct and cut out the delivery middlemen.
Some will succeed and some will fail, but nearly all will try to get a piece of it.
Amazon did not buy Whole Foods for fun.
This is true, but a lot of them have turned to online sales themselves. Order online, pickup in store is getting increasingly common.
Of the B&M stores complaining about getting eaten by the Internet, many “mom and pops” are simply reaping the crop they’d previously sowed when they were the only game in town - poor customer service, lack of product knowledge, arrogantly mistreating customers that they thought couldn’t go anywhere else, etc.
Yup. Though the Instacarts and DoorDashes of the world will still have a role with smaller stores that can’t afford large delivery fleets or in areas the fleets won’t serve.
In my experience it was the reverse; the chains brought in indifferent employees, while the mom & pops were local owners with local workers.
Actually you can if you buy what you have.
have bought the same Merrill Moabs size 10, both low cut and high cut at least four times
That is, from a reputable manufacturer there is consistency
I ran into an awful lot of “local owners with local workers” that were charging extortionate prices with terrible customer service because they were “the only local store selling {product type}, so where ya gonna go?”
This backfired on them when chains came to town, and it’s backfired on them even more now that internet commerce is a thing.
A case in point: For a while in the 90s, I had some really bad years and was compelled to live in a small town outside Dallas for economic reasons. The local feed store was a Mom and Pop operation, was the only such operation for a good 20-30 miles, and they knew it. One day they decided they wanted more money and quadrupled the price of all pet food. When customers complained, they were told that the customer obviously had money for a lazy freeloading non-working animals so they could easily pay the increase and if they didn’t like it, why, they could go to Dallas and get their food instead. Including no few little old ladies who lived downtown and *couldn’t* drive to Dallas to get food for their little furry friends. I don’t really think I need to tell you what kind of situation that put these fixed income seniors in; the owners of the store and the staffers simply didn’t care.
There was no shortage of opportunistic jackass little M&P stores like this in the rural area either.
Watching them go out of business, screaming all the way, when the chains showed up a few years later was hilarious.
From speaking with others, this isn’t/wasn’t uncommon in rural areas all over the country.
We just had a True value, local owned, hardware store shut its doors after 10 years.
The owner cited many reasons and did point out that they had comparable prices to the Home Depot about 8 miles away and said she did a fair business but no where near what they needed to ‘stay afloat’.
She did cite the easiness of sitting on your couch, eating bon bons and ordering over the internet with ‘free’ delivery the next day as a factor but only one of many.
Yep, I don’t mind going to DSW when it’s time for new shoes.
I believe you; I just live in a different area (a dozen miles west of NYC in NJ). We’ve already lost most of our family-run restaurants, delis, and other small businesses; chains have displaced most of them (and it is a real shame; they were very good - probably because of the competition - and offered better product).
It is getting harder and harder to find a place that makes old-school American sub sandwiches...
Not sure which plague is worse - managers or coronavirus.
I don’t know where you are, but my local Ace Hardware/TrueValue/etc., independent stores have learned to survive with order-online, pickup-in-store as an option.
Things such stores need to survive in this era:
1. Great customer service and product knowledge.
2. Significant marketing campaigns and targeted online advertising. A lot of people don’t know these stores exist as they really only know to look for HD and Lowes.
3. Knowledge to leverage tech at every point they can.
4. Doesn’t hurt to offer weird stuff that the big boys don’t bother with but somehow a lot of people end up needing.
5. Constant reassessment and re-evaluation of all the above.
There are several such stores in Dallas that *should* be dead but have survived the online onslaught through the above. Also, it doesn’t have to be delivered, it just has to be available online for order 24 hours a day, and accommodating hours for pickup at the store the next day.
Newly minted MBAs given power and lifetime sinecure bureaucrats are tied for that. Coronavirus is second.
Businesses fail because of management. Period. This comment is indicative of stupid managers who are probably Dunning-Kruger charter members.
It is really easy to find such sandwiches here in DFW. Lots of local shops, no few chains - not including Subway or Quiznos in that list, either. Don’t know what to tell you on the lack of availability in your area.
The thing that kills businesses is people with MBA degrees.
In my area the family delis (which were everywhere 30 years ago) are dying, so sandwiches either come from a chain or the pre-made garbage in supermarkets and convenience stores. A lot of it is demographic; the Americans are disappearing, and the replacements have their own “sandwiches” (empanadas, tacos).
The family pizzerias are hanging on, despite the competition of the chain stores which have sprung up everywhere here; the difference in quality and taste is incredible. I live near the pizzeria featured in the “Sopranos” intro; it now has Egyptian owners (but kept all the mob paraphernalia as the décor).
The NYT understands Capitalism only slightly better than a dog understands what makes a radio work.
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