Retail Woes

Little wonder consumers are fearful of spending whatever discretionary funds they may have. They're worried about the future, about finding themselves short of the wherewithal to get by. They're fearful of losing their employment, and with that, the security of their homes, their quality of material life-comforts. And there's little wonder that insecurity has fallen so heavily upon one country after another. Their economies truly are in dire straits, with governments frantically attempting one strategy after another to rescue their finances from further plummets.

If Canada's situation is anything to go by - and in a sense it is, in another it isn't entirely, since Canada's financial and lending institutions are in far more secure shape than most of the G8 and indeed, of the developed world, given its legendarily conservative money management - there's a culprit at play here. Consumers have been discouraged, and heavily so, by the elevation through the news media of a component of hysteria unmatched by any other catastrophe, natural or man-made, we've faced of late.

You can hit people in many places; the fear of impending climatic doom, that of the very real threat of fanatical Islamists scheming to bring down Western society in a cataclysmic rain of bloodshed, and it's worrying, but people bounce back, trusting to the state security apparatus to kick in. Strike them with a direct threat against their more immediate well-being, their quality of life granted them by a fluid and ever-growing economy, and the compulsion to hold back, save what they have, brings on the quality of withdrawal.

Withdrawal from the marketplace, that is. The hoarding instinct begins to surface. And the more worried people become, the more the news media appears to revel in producing one story after another of financial catastrophic doom. The emphasis that no one is immune, the endlessly woebegone descriptions of the growing ranks of the unemployed, the collapse of international trade, the constrained lending situation, and people withdraw, seeking comfort in hoping to be able to stay the course.

Of course that impacts heavily on the retail industry, the commercial hub of a country's economic activities. Construction begins to slow, as people are no longer eagerly in pursuit of new homes, and resale properties begin to slump as well. Manufacturing is hit, hard, as consumables sit on shelves far longer than considered normal. Corporations begin to worry about inventory, and close down their enterprises, many filing for bankruptcy, others migrating to offshore placements to decrease operating costs.

Along with the government's attempts to secure security in financing, and lending capacity for the financial sector, campaigns to entice and comfort the large consumer base in their countries, to encourage people to understand that if they don't spend, they're impacting further deleteriously on the situation, is falling on deaf ears. All those news items rife with unequivocal fear-mongering, so helpful to sales and ratings, have continued to undermine consumer confidence.

The wary, fearful public is more than slightly aware of the discomfiting reality that their government and its various agencies, striving for recovery in an interrelated world of financial collapse, is straining resources normally set aside in prudently conservative treasuries to ensure government coffers don't fall away from the comfort of surplus status. But this is a recognized recession, and it's been well bandied about that even the experts have been stunned at the collapse of global finance. And the particulars behind this failure of capitalism.

The fear of an ongoing recession and tightening credit, along with the steadily growing unemployment rate has encouraged people instead to gear themselves toward spending far less than they normally would, particularly at the most consumer-conscious time of the year, the Christmas season of gift-giving. Profit margins among commercial retailers have hit rock bottom. And the economies of various countries continue to sink like a cement block in a deep-running stream of fear.

It's necessities only now, as people hunker down to wait out the current economic storm, with the hope that it won't last longer than their anxieties can cope with.