Canuckflack

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Archive for the ‘Economics’ Category

Ice cream and the gilded cage

Friday
Aug 15,2008

At some point in the past, my parents lived in Kingston, Jamaica. A lovely country with a rich heritage, many pleasant and welcoming citizens and a mouth watering (and searing) bbq tradition.

Their ranch home, however, constantly reminded each visitor that there is a dark and violent side to the Jamaican capital. Guards on duty twenty four hours a day, dogs at their side. A perimeter wall topped with shards of broken glass. A CB radio constantly ready in case of crisis. An internal “safe room,” secured with wrought iron gates and cinder blockwalls.

Jan Chipchase recently visited Afghanistan, were she noted that the sound of an approaching ice cream cart is actually a reminder that her his freedom of movement and action is quite circumscribed, especially in a land where violence and personal harm can arrive quickly and with little notice.

Sunday
Aug 3,2008

A former television repair centre, found on a backstreet here in Ottawa. The sign hangs over a roll-up steel door. This was personalized and convenient service, allowing you to drive your car or truck right into the service bay so your oversized television console could be brought in for repair with relatively little fuss.

The font choice is remarkably clean and modern for a business so obviously rooted in the 1960s and 1970s.

Let’s remember: when we used to talk about “portable TVs,” we meant bulky and heavy 13″ units, often with a built-in VCR. And rabbit ears.

Those units, as the sign notes, you could drag around to the side door yourself.

Over the past seven or eight years, it has become ridiculously easy to buy and set up a 42″ television - by yourself. I still remember a time when, as you were moving into a new house, you had to decide where the television was going to be placed - because it took two burly movers to put it in place, and it would never be moved again.

Ideas that seemed smart at the time

Thursday
Jun 19,2008

Airlines, in a desperate attempt to remain profitable, are considering incremental charges and fees for services once considered routine. Like checking your bags before boarding your flight.

” … J. Scott Kirby, president of US Airways, said that passengers would prefer to pay for the features they actually used. Historically, he said, all passengers paid for checking bags even when they did not bring luggage, because a charge for transporting them was built into the ticket price.

Now, he said, “those who want the infrastructure to check bags, will check bags; those that don’t, won’t pay for them.” (NYT)

I hope airlines are building in the infrastructure for passengers who will choose to carry-on their luggage. Faced with an economic disincentive, passengers are bound to opt for the haul and stow - which may be a problem considering most airlines are also moving to smaller regional and commuter jets on most domestic flights.

Tuesday
Apr 29,2008

The political economy of taco trucks, as explained by Jonathan Gold: personal skill, quality products not overburdened by design or packaging, effective location scouting, and feature-rich marketing.

“…I love mini-malls. I love swap meets. I love tamale carts. I love itinerant fruit vendors. I love old Guatemalan women with hampers full of corn on the cob and squirt-bottle mayonnaise. I love the pickups that roam the Eastside, with loads of mangoes or bushels of fresh green chickpeas.I love the guys who lop off the tops of coconuts with rusted machetes.

I love entry-level capitalism at its most chaotic, where the barriers to doing business are on the wispy side of minimal, where a family with a dream and a catering license can support itself selling delicious barbecued cabeza from a truck window, where two dozen oddball eating places can be launched for less money than it would take to open a single outlet of Burger King.

There are plenty of cities in America where freedom is best expressed as the right to choose between Wendy’s, McDonald’s and Carl’s Jr., but Los Angeles is not one of those places. I think that’s why I live here…” (LA Weekly)

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Monday
Mar 17,2008

This will be a first. Faced with economic contraction and consumer apprehension, how will companies increasingly focused on service, brand differentiation, environmental qualities and aspirational marketing react?

How will consumers react? Unlike the last two economic slowdowns, consumers are feeling the credit crunch in their pocket book. Will they change their spending habits? Will they lower their expectations from products, brands or companies?

Or would they expect companies to eat the economic difficulties (including the downstream costs resulting from soaring prices for staples like grains and oil) and spare them the pain while continuing to deliver the quality?

Starbucks has sent a signal: it is slowing the opening of new stores in the United States. Frankly, Starbucks has overpopulated so many neighbourhoods with outlets it could probably close hundreds of stores and maintain its volume.

(Well, maybe. My assumption only works if people are going to Starbucks for its aspirational qualities, not simply convenience. If they think McDonalds or a local coffee house has an equally good morning coffee, Starbucks sales could fall)

Last night, John Moore asked “if Walgreens went out of business tomorrow, would any of us care?

No. Not really. Just like we didn’t care that Pier 1 and Bombay Co. stores closed. Did YOU notice that Restoration Hardware was in the toilet?
Difference is, I don’t look for aspirational values in my drugstore. I look for cheap children’s Tylenol and brand name toothpaste. And maybe a wide selection of Mother’s Day cards late at night.

Forward-thinking companies like Target have been trying to find a price-sensitive but fashion-forward niche in the general merchandise market. Kohl’s is trying the same trick by hiring Dana Buchman. Ralph Lauren is creating a line of goods for mass merchandisers, with a separate identity from his bread and butter lines.
If the credit crunch continues, and the US dollar continues to be battered in comparison to international currencies, consumers may face a difficult choice between affordable products and all the wonderful product qualities they have come to appreciate and flaunt: environmental sensitivity, design, flavour variation, international influences, and individual portion sizes.

In the end, which comes first: value-added attributes, the pocketbook, or government cheese?

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Tuesday
Jan 22,2008

It’s unsettling, sort of like a time warp. “Stop the Presses: the transition from paper to pixel will bring good news” is in the latest issue of This Magazine - but it reads like it was written in 2005:

“…The transition from print to digital content will not happen overnight, and it won’t be without its difficulties. There will be those writers who will whinge about the new challenges posed by online journalism, be it the increased interactivity with readers, the possibility of periodic competition with the dreaded “blogosphere” or merely the hardship of maintaining an email address.

Editors and publishers will, one hopes, eventually have to address the fact that the online content that increasingly drives their bottom lines isn’t rewarded financially at the same rate as “traditional” contributions.

Some readers—older ones, mostly—will complain about the move from paper to pixels. But for the overwhelming majority of us, these changes are all to the good. There was a time when many people thought that the arrival of the internet would mean the death of the newspaper as we know it. Instead, it looks as though it could lead to its reincarnation.”

All this because the New York Times removed their subscriber wall?

Monday
Dec 31,2007

I realize that Canadians are buffered from breaking U.S. trends in casual dining, but a 90 minute wait to get into a Cheesecake Factory?

“…The average wait at a Cheesecake Factory restaurant is 1 1/2 hours, said Alethea Rowe, director of restaurant marketing for the Cheesecake Factory Inc. Once the doors open and the restaurant fills up, then the waiting line forms. …

The lines, however, are a positive sign to restaurant management. “I think this is the biggest compliment our guests can give us,” Rowe said. “It tells us that they think the Cheesecake Factory is someplace special.”(Hartford Courant)

Yeah, that’s what the investors in Planet Hollywood thought as well.

Lego and economic development

Monday
Dec 10,2007

Lego building blocks and economic history. Two of my favourite things. Yes. I know I need professional help, thanks.

Glancing through Stanford magazine, I came across an article on the SEE Science Center, where you can find a reconstruction of a late nineteenth century millyard: the Amoskeag Millyard of Bedford, New Hampshire.

The millyard itself was quite impressive, with mile upon mile of mill buildings, canals, railway spurs and tens of thousands of workers.

The display, built of millions of Lego building blocks and housing thousands of Lego workers, seems to make an equal impression.

There’s even a YouTube video of the train that circles the display.

Of course, mills were often horrible and depressing places to work, with long hours, relatively low pay and a significant possibility of workplace injury.

Today, many small towns with a proud industrial heritage are re-purposing these mill buildings, encouraging loft developments, craftsman industries and incubating web businesses.

Lego and yuppies. Isn’t progress wonderful?

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