China as a retail frontier
(The following is a response to an article about Kingfisher’s efforts in China.)
“It took far too long for Kingfisher and HD to recognize that [China] is different and requires core rethinking. While the goal of improving living conditions is similar to western economies, the fact is that China jumped over many of the steps that led to big-box DIY in the West.
“It was difficult to make this argument 10 years ago when those in power to make decisions on investments never left their comfort zone, even when visiting China. They stayed in exclusive western-style hotels, took tours of factories and ancient tourist attractions, but never investigated Chinese life.
“In Shanghai or Shenzhen, for every two-income family able to afford a condo, there are three or four legal or illegal workers happy to do anything for $1 per hour. Because condo owners make as much as $40 an hour combined and work 60 to 70 hours per week, including side jobs, they do not see a value in the ‘pleasure’ of doing it themselves.
“The argument for showrooms over DIY big box was made to the HD execs from the inside in 2002 and in 2008 to Kingfisher from the position of a supplier. Several years and millions of dollars invested later, these two well capitalized and talent-laden companies are finally believing the facts on the ground.
“It will be amusing to see the next 10- to 20-year cycle when the Chinese showroom home improvement retailers try to bring their model to the U.S. and Europe. I am confident they will make the same kind of mistakes.”
— Name withheld
Down on Main Street
“Struggles of small businesses in today’s market are more than just tight credit, regulations and a poor economy. This inevitable crisis was years in the making while we all stood by watching.
“We live in a society in which no one wants to take responsibility for their own actions, and it is expected for someone or the government to step up and bail us out of the mess we have created. It’s as if the average American feels it is owed to them, and not because they have earned it. We have trained [people since they were children] that everybody is a winner, when in ‘real life’ that is not true.
“Lawsuits are rampant, and we settle unjustifiable suits because it makes economic sense, not because we are guilty. Therefore, we have created the ‘easy money’ plan for attorneys and plaintiffs.
“We have allowed people who cannot handle their money to file bankruptcy will little or no consequences. Small businesses are caught in the crossfire of this and are the ones that crawl away wounded or dead. Then we allow the offenders to do it all over again.
“Too many times our local governments will court the competition based upon vague promises, all under the pretense of creating jobs. Hardly ever has the government come to the local small business and asked, ‘What can we do to help you grow?’ The only time they appear is when informed of the impending closure, and they can’t understand why this store cannot make it. After all, they created all those new jobs, so you should be doing fine. How many city officials from Harrodsburg, Ky., went to Coleman Lumber and asked what they could do to help the 100-year-old company? How many Representatives or Senators looked for grant money for this company or worked on an SBA loan? The government only thinks about small companies when they are gone, and the tax revenue is no longer coming. Then they look at the rest of us to shoulder the revenue they lost.
“We need to vote in the upcoming elections for a true change, or it will never happen.”
— Arthur Mize
Associated Lumber Industries
“ ‘Too much regulation’ is such a generic, undefined broad-based sound bite that it has lost all its meaning. Let’s not forget that it’s the lack of regulation that got us into this mess. Exactly what regulation hurts retail? Health care? Minimum wage? Unemployment benefits? These costs affect everyone the same. This is simply the echoing of special interest groups with a much broader political agenda.
“The issue with the economy is unemployment and the lack of disposable income for the lower and middle classes. For years we have had access to home equity that never really existed, and now it’s time to pay the piper.”
— Frank Douwes
“Anti-business attitudes from Washington aid and abet this threat [to small business]. Underwater home value; lack of confidence in our leaders; and direction of our country, health care, taxes — as the old saying goes, ‘It is what it is.’ We will take these challenges head on and somehow succeed. Because that’s what we do.”
— Paul Gabbard