Yesterday our roofing company came to do some work at our home. We had used them a couple of years ago and at that time had waited a few weeks for them to be available. This time the crew showed up a few days after we had requested them. The owner mentioned that things have been slow and slowing for some time. Where large roofing companies used to be busy with the biggest projects, now they are taking whatever jobs are available. This means that smaller crews are having a hard time keeping steady. “We used to do one job a day, 6 days a week. Now we are lucky to get 3 jobs a week”, he said.
Last night I went to Zehrs to get the week’s groceries. At the entrance there was a sign “Save Springwater Park” and a woman soliciting signatures in support. Springwater Park has been a treasured provincial park, just north of Barrie for more than 50 years. We bought yearly passes for it when our kids were small. “The province is cutting a huge portion of its funding,” she explained, “the wildlife and educational support are being phased out”. “Cutbacks are everywhere it seems,” I said in sympathy as I signed. “Unless you’re a banker” she added. “Good point”, I said, surprised to hear her say what was in my head, “good luck.”
At the checkout at 8 pm, there was only one cashier line open and no one helping to bag. When the 60 something Scottish lady finished ringing me through, she stopped to help me finish bagging. “No helpers tonight,” I offered. “Oh no”, she said, “the cutbacks are getting downright scary if you ask me. We are now on skeleton staff in the evenings and they laid 700 people off at Loblaws head office today. “Really?” I was taken back, I hadn’t heard. “Seems customers are spending less these days than they used to” she went on, “everyone seems to be scrimping and saving. Pretty frightening if you ask me”. I could feel her worry.
As I was driving home, I was thinking back to a time before the superstores. Remember when grocery stores sold groceries but not clothes, cell phones, patio furniture and kitchen appliances? I remembered the recent news on how Rona was moving away from 25 million dollar superstores to smaller $500K neighborhood hardware stores. Downsizing to meet the smaller spending habits of heavily indebted and now newly frugal customers. It seems that scaled down grocery stores are likely coming next.
I know that this is the inevitable process in a de-leveraging world: less government funding, less consumer spending, smaller and cheaper over bigger and more expensive. Healthy in the longer run, but painful for many as the global economy downsizes from the credit bubble. Credit abuse boosted consumption and now it is taking away.
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Danielle I second your observation out here in Metro Vancouver. I know a few young people working p/t at local grocery stores here and they too are suffering from cutbacks to hours/staffing. My cousin, who is a student, used to get 24 hrs/week p/t and is now lucky to get 8.
I also know cold food storage delivery drivers who deliver to the various grocery stores in the region and they confirm this by saying their deliveries are way down.
A lot of billionaire Jim Pattison’s flagship Save on Foods stores are also converting to a ‘no frills’ version known as Price Smart.
Because of the ridiculously high housing costs here and extreme indebtedness, it seems like people are scrimping on food to get by. What a paradox when you look at our house prices!
Yes, I agree with you, a sign of tough economic times, intensified by people taking on way too much debt.
Deleveraging hurts.
A relative who has been in the renovation and construction business for nearly forty years, covering a broad spectrum from commercial and industrial to residential, told me last year was the worst year he has ever had.
In contrast my son who works in the heavy equipment sales business, mining, road buiding and infrastructure in general, has been been crazy busy. Most projects however are from one time Government funded mega projects, stimulus spending.
Trickle down from QE has not, will not work to support the broad economy only the elite’s benefit.
Eye’s wide shut puppets cannot stem the tide.
Very poignant post, Danielle.
To be honest, I am not seeing the same level of spending cut-backs where I live in Downsview, but then again, I hate shopping so I may not be the most qualified observer.
A couple of things I have taken notice of over that past several years are the tremendous competition in retail, and the growing lag times of company receivables–both signs of less money in the real economy.
I viewed the growth of the all-in-one superstore (which was pioneered in the US) not as a sign of innovation, but as a sign that retailers were fighting over fewer and fewer dollars. As for receivables, I remember when net 30 days was typical. Then 60 day terms became widespread. Then 90 days become more prevalent. These days, companies often simply pay what they can when they can (I am seeing this first hand). It is a sign that the credit-driven consumption boom is over. Credit is getting harder to get, so more and more companies are operating hand-to-mouth, so to speak.
This is simply what happens when a society spends too much of its future wealth. The burden becomes especially onerous because once the credit stops flowing easily, now you have to earn enough to pay for today’s need––and yesterday’s spending––and tomorrows savings all at the same time. Like you said, it’s necessary, but it will be painful for most of us.
And what exacerbates the whole problem is governments debasing our currency, so no only is there less to go around, but what money we do have has less value as well. Salt in the wounds. Meanwhile, the super rich feel that an income of 20 million per year is not enough because after taxes it’s only 10 million, or whatever (based on an interview on BNN today). Sick.
Reading Gary Shilling’s “the Age of Deleveraging” so your musings are timely Danielle. He emphasizes deflation as a consequence of both debt reduction and slow growth, and to me your “anecdotal observations” underpins this argument. There are going to be a lot of “retired” Canadians who will work part time just to keep up.
I’m still not sure if disinflation leading to deflation will be the hallmark of the next few years but keeping debt free, saving for the future and living within your means understates some sacrifice today to be properly prepared for tomorrow.
Life is often (almost always) hard. As the saying goes “get over it”. Also remember Pogo who said, “we have met the enemy and they are us”. We all want and want and want…
If we persist in our wants here’s how a future news story might read:
Today the Canadian auto workers union and Global Motors (GM) ended their seven-year strike/lockout with a new labour agreement. The new agreement provides generous wages, private physician health care and pensions at twice the final workers wages. Unfortunately no workers are actually covered by the agreement because GM built its last car in Canada ten years ago. A union spokesman, reached at his part time job at Tim Hortons, said that he was highly confident that GM would soon be opening new plants in Canada and employing workers to take advantage of the high quality of work their grandfathers were known for. A GM spokesman could not be reached because all senior executives were in China at the opening of their tenth mega plant.