Two More Victims Of The Retail Apocalypse: Family Dollar And Coldwater Creek

TEC ^ | 04/19/2014 | Michael Snyder

[SeekAndFind]

Did you know that Family Dollar is closing 370 stores? When I learned of this, I was quite stunned. I knew that retailers that serve the middle class were really struggling right now, but I had no idea that things had gotten so bad for low end stores like Family Dollar. In the post-2008 era, dollar stores had generally been one of the few bright spots in the retail industry. As millions of Americans fell out of the middle class, they were looking to stretch their family budgets as far as possible, and dollar stores helped them do that. It would be great if we could say that the reason why Family Dollar is doing so poorly is because average Americans have more money now and have resumed shopping at retailers that target the middle class, but that is not happening. Rather, as you will see later in this article, things just continue to get even worse for Americans at the low end of the income scale.

I was also surprised to learn that Coldwater Creek is closing all of their stores...

Women's clothing retailer Coldwater Creek Inc. on Friday filed for Chapter 11 bankruptcy after failing to find a buyer said it plans to close its stores by early summer.

Coldwater Creek joins other retailers to seek protection from creditors in recent months as consumers keep a lid on spending.

The company said it plans to wind down its operations over the coming months and begin going-out-of-business sales in early May, before the traditionally busy Mother's Day weekend.

Coldwater Creek, which has 365 stores and employs about 6,000 people, has five stores in Maryland.

I remember browsing through a Coldwater Creek with my wife and mother-in-law just last year. At the time, my mother-in-law was excited about getting one of their catalogs. But now Coldwater Creek is going out of business, and all that will be left of that store is a big, ugly, empty space.

Of course the fact that a couple of major retailers are closing stores is nothing new. This kind of thing happens year after year.

But what we are witnessing right now is really quite startling. So many retailers are closing so many stores that it is being called a "retail apocalypse". In a previous article entitled "This Is What Employment In America Really Looks Like…", I detailed how major U.S. retailers have already announced the closing of thousands of stores so far this year. If the economy really was "getting better", this should not be happening.

So why are so many stores closing?

Well, the truth is that it is because the middle class is dying. With each passing day, more Americans lose their place in the middle class and fall into poverty. The following is an excerpt from the story of one man that this has happened to. His recent piece in the Huffington Post was entitled "Next Friday, I'll Be Living In My Car"...

For the past 13 years, I've mostly been doing facility management in several locations across the state. After the position turned into more of a sales role, they laid me off. Since then, I've been looking to find any type of work. I've applied for food stamps, and I'm waiting for that. I'm mostly eating soup from a food pantry.

I've been on several interviews -- second, third, fourth interviews -- and just haven't been able to land a job for whatever reason. I definitely have the qualifications and the experience. Last week, I had a job offer that I thought was secure, and we were talking my work schedule. They decided to call me back and go with an assistant rather than a manager.

For a number of applications, I've dumbed down my resume. I don't even go with a resume sometimes, just because I don't want them to know that I'm educated and have a master's degree. It shoots me in the foot. They don't want me because they don't think I'm going to stay. I don't blame them. I was making six figures at $60-70 an hour. Now, I'm looking for a $10 an hour job.

There are millions upon millions of Americans that can identify with what that man is going through.

Once upon a time, they were living comfortable middle class lifestyles, but now they will take any jobs that they can get.

Just today I came across a statistic that shows the massive shift that is happening in this country. A decade ago, the number of women working outnumbered the number of women on food stamps by more than a 2 to 1 margin. But now the number of women on food stamps actually exceeds the number of women that have jobs.

Wow.

How could things have changed so rapidly over the course of just one decade?

And sadly, things continue to go downhill. Every day in America, more good jobs are being sent out of the country or are being replaced by technology. I really like how James Altucher described this trend the other day...

Technology, outsourcing, a growing temp staffing industry, productivity efficiencies, have all replaced the middle class.

The working class. Most jobs that existed 20 years ago aren’t needed now. Maybe they never were needed. The entire first decade of this century was spent with CEOs in their Park Avenue clubs crying through their cigars, “how are we going to fire all this dead weight?”. 2008 finally gave them the chance. “It was the economy!” they said. The country has been out of a recession since 2009. Four years now. But the jobs have not come back. I asked many of these CEOs: did you just use that as an excuse to fire people, and they would wink and say, “let’s just leave it at that.”

I’m on the board of directors of a temp staffing company with one billion dollars in revenues. I can see it happening across every sector of the economy. Everyone is getting fired. Everyone is toilet paper now.

Flush.

There is so little loyalty in corporate America these days. If you work for a major corporation, you could literally lose your job at any moment. And you can be sure that there is someone above you that is trying to figure out a way to accomplish the tasks that you currently perform much more cheaply and much more efficiently.

Most big corporations don't care if you are personally successful or if you are able to take care of your family. What they want is to get as much out of you as possible for as little money as possible.

This is a big reason why 62 percent of all Americans make $20 or less an hour at this point.

The quality of our jobs is going down, but the cost of living just keeps going up. Just look at what is happening to food prices. For a detailed examination of this, please see my previous article entitled "Why Meat Prices Are Going To Continue Soaring For The Foreseeable Future".

As the middle class slowly dies, less people are able to afford to buy homes. Mortgage originations at major U.S. banks have fallen to a record low, and the percentage of Americans that live in "high-poverty neighborhoods" is rising rapidly...

An estimated 12.4 million Americans live in economically devastated neighborhoods, according to American Community Survey data collected from 2008 to 2012. That's an 11 percent jump from the previous survey, conducted from 2007 to 2011. Even more startling, it's a 72 percent increase in the population of high-poverty neighborhoods since the 2000 Census.

If nothing is done about the long-term trends that are slowly strangling the middle class to death, all of this will just be the beginning.

We will see millions more Americans lose their jobs, millions more Americans lose their homes and millions more Americans living in poverty.

The United States is being fundamentally transformed, and very few people are doing much of anything to stand in the way of this transformation. Decades of incredibly foolish decisions are starting to catch up with us, and unless something dramatic is done right away, all of these problems will soon get much, much worse.

[Mike Darancette]

Dollar stores are not a bargain, the stuff they sell is only worth a dollar.

[mountainbunny]

Fourteen years ago, there were five full-sized grocery stores within two miles of my home. Plus pharmacies, three large drug store chains, and several smaller stores. Two are now empty, two have rebuilt in the same area, and one remains more-or-less unchanged.
We are still over capacity. This is going to take time to fix, and it is going to hurt.

[pallis]

The Democrat solution for the collapsing “middle class,” if I can use that term without being told it is un-American, is to raise minimum wage, and create bogus problems like pay inequality for women, adding to the problem. The leftist vision of an elite lording over a serfdom keeps them charging on with absurd legislation like Obamacare and amnesty. Democrats won’t stop until they have destroyed everything. The people who are voting for Democrats, so they can keep their hope of redistribution, are removing the rungs on the economic ladder that can provide them a way up.

[Kickass Conservative]

All that rhetoric and I never saw the words “Democrat” or “Obama” mentioned in the article. Simply amazing.

[sand88]

Another clueless idiot spouting the same old liberal crap while completely ignoring all the damage his savior Obama has done. Higher taxes, a war on energy, market uncertainty, huge rises in food and fuel costs, outrageous healthcare costs and never-ending class warfare rhetoric have absolutely nothing to do with this, aye Snyder?

Correct. The entire fault of the state of our economy lies at the feet of government.

Yes, Obama is the main destructive force, but we need to also recognize that government at all levels is killing us with increasing taxes and destructive regulations.

Local governments all over seem to be increasing the number and cost of idiotic, sadistic permits.

Control freaks at the local, state and national level are brutalizing taxpayers and businesses.

[Company Man]

Family Dollar is expanding in DFW, opening several new stores near me. Although everything is not one dollar, everything I find there is a good value. And the customer service people have a great customer-first attitude.

[BCrago66]

What the article does not make clear is that Family Dollar has a total of 8,100 stores in America; thus, closure of 370 stores comes to less than 5%. Plus, the chain is still opening new stores, even if at a slower clip. In this context, the store closure doesn’t seem so significant. If there are not lease obligations a company cannot escape, it seem wise to shut down poorer-performing outlets.

Source for the 8,100 store figure:
http://www.bizjournals.com/columbus/news/2014/04/14/family-dollar-closing-370-stores-lowing-prices-to.html

[SeekAndFind]

Yeah, and undoubtedly, you will blame the Koch Brothers, and not the cause

[Fiji Hill]

Our modern understanding of the word unfortunately has CHANGED ( much like we use the word — ‘gay’ today ).

It now means an event involving destruction or damage on an awesome or catastrophic scale.

Not for me. I'll never use "apocalypse" in that way--just as I never use "alibi" to mean an excuse or "deter" to mean dissuade. And I hardly ever use "gay" in the way it's usually used today.

[cloudmountain]

So, Americans should live a frugal life because you think there's too much consumin' going on out there?

Did I say that? I don't think so. YOU said it, however, so maybe YOU think that way.

[cloudmountain]

Over-building is a big thing.
Not to dismiss all of the points in this article out of hand, but if you go back over the last 50 years and look at the ratio of retail space to population in this country, you'll see a huge increase in the retail space that started in the 1980s and continued for about 20-25 years. It all came crashing down in the late 2000s because there was never a "need" for all these retailers in the first place.

You are correct.

[cloudmountain]

Fourteen years ago, there were five full-sized grocery stores within two miles of my home. Plus pharmacies, three large drug store chains, and several smaller stores. Two are now empty, two have rebuilt in the same area, and one remains more-or-less unchanged.
We are still over capacity. This is going to take time to fix, and it is going to hurt.

Yes, I know that kind of hurting as I SAW it in northern California when the government shut down so much of the fishing and lumber industries. The young men of the area were JOBLESS.

Now northern California grows huge marijuana crops. Those young men are "harvesting" again.

There is a bumper crop of chemists there too making all the illegal drugs to ingest via pills. THEY have the university degree to be those chemists.
I don't suppose their mothers envision their sons, the "chemists," making all those illegal hallucinatory drugs for the sapheads fools morons sad folks who can't cope with the real world without, um, "help."

They need GOD.

[cloudmountain]

All of the middle class jobs have been shipped out of the country or automated out of existence.

Those jobs were shipped out because the foreign countries (China) would do the same job for peanuts. Union wages were as high, in some places, as Ph.D. wages.

My family was always blue collar and union wages were what we lived on. But, skilled/unskilled workers went too far and they lost their jobs. NOW what did they have? Unemployment, food stamps and welfare. THAT doesn't last forever.

It was a sad situation.
My parents made sure that we children had the university degree and would be able to take our profession any where in the world. And we did.

Automation was BOUND to replace people. MOST folks knew it was coming. Their best choice was to go to an institution of learning and get a degree in "airline mechanic" or some such thing. Those jobs are STILL in demand.
Another huge problem for Americans is their lack of basic reading and writing skills. The "feel good" attitude was in vogue...so one can ask: "Do you 'feel good' about being a 20-year-old illiterate?"
The primary schools FAILED in that but make their illiterates feel VERY good in the "self esteem" department. Oh, if there were jobs at that!

The community colleges USED to have one or two "remedial" reading and writing classes. NOW there are dozens and dozens of remedial reading and writing classes that go ALL the way back to "Dick and Jane." I know this because I taught at the CC level for 27 years.
BOTTOM LINE: there is no escape from continuing education.

[Black Agnes]

Because destroying our industrial capability, long term, was worth it to destroy the unions.

Right.

The big question is this. 50% of people have IQ’s less than 100. What do you propose to do with those people? They have been automated out of having stable family supporting jobs. The rest have gone to China. Do you sterilize the lower IQ people? Let them starve? What, precisely do you propose to do with them. Because right now they’re the FSA and they’re voting against your and the country’s best interests.

[cloudmountain]

Because destroying our industrial capability, long term, was worth it to destroy the unions. Right. The big question is this. 50% of people have IQ’s less than 100. What do you propose to do with those people? They have been automated out of having stable family supporting jobs. The rest have gone to China. Do you sterilize the lower IQ people? Let them starve? What, precisely do you propose to do with them. Because right now they’re the FSA and they’re voting against your and the country’s best interests.

=================================

The average human I.Q. is 100. That is just standard information.
I would really QUESTION your statement: 50% of people have IQ’s less than 100.
It may SEEM that to you, but, you are here, writing away, so the rest of those below your I.Q. may not seem bright at all.
Human I.Q. levels out at 10 years of age and that is where those folks stay for the rest of their life. (Google)
Intelligence quotient is one's ability to learn, nothing more.

Those with lower I.Q.s can clean bathrooms, wash dishes, mow laws and other such jobs that require minimal skills.
There still are many of those jobs. There will always be those jobs.

People who cannot function on any level in our society must be taken care of. Why leave them on the streets? THAT is not a Judeo-Christian ethic, now, is it?

[deport]

Family Dollar also faces competition from Dollar General,

---

And others. Also they seem to build within a shopping radius of each other some of the
time. Walmart has hurt them some I’d guess with their Walmart Express type facilities.

[CodeToad]

“Most big corporations don’t care if you are personally successful or if you are able to take care of your family. What they want is to get as much out of you as possible for as little money as possible.

This is a big reason why 62 percent of all Americans make $20 or less an hour at this point.
“

Written by a liberal.

[Black Agnes]

50% less than 100 is what ‘average’ means. If the average IQ is 100 then by definition, 50% of people have an IQ less than 100.

Automation will take away most of those jobs you listed. In fact, within a decade the IQ at which you become redundant to the global elites will likely increase to greater than 100. Making a large portion of the ‘rest of us’ redundant is why the global elites are pushing the whole AI/automation meme. Did you think they were joking when they state the ‘ideal’ number of humans on the planet was around 100M?

Again I ask you. What do you propose to do with these people? Sterilize them? Euthanize them? Let them starve? Deny them the vote?

Because the WILL continue to be the FSA. And they WILL continue to vote themselves the largess of the public purse. Initially because they have to, later on because can.

Right now a large portion of the FSA army stays home during the day (paid for by you!) smokes dope and breeds. Look at the crime sheets to see how this works out long term.

50 years ago those men could get a job paying a wage sufficient to support a wife at home with the kids. You just think paying union wages is expensive. Just wait till you’re supporting all the grandchildren of such people. And paying for their incarceration.

Killing the unions by killing our jobs is like cutting off your nose to spite your face. You still lose. Maybe even more spectacularly in this case, if we’re ever in a war with our current industrial suppliers. Like China.

[El Laton Caliente]

Family Dollar is the K-Mart going up against Dollar General’s Wal-Mart status. It is simple, when the two stores are within a block of each other, Dollar General will have twice the traffic.

I can’t really put my finger on why. I’ve even quizzed the women around me as to what the reason for the choice without a good answer.

Family Dollar carried a slightly wider range of products, but Dollar General seemed to target the customer’s buying habits better.

[cloudmountain]

50% less than 100 is what ‘average’ means. If the average IQ is 100 then by definition, 50% of people have an IQ less than 100.

People with less than 100 I.Q. are not morons, idiots or worthless people. I do NOT equate I.Q. with value as a person either. I was talking only about ability to learn.

People with an I.Q. of 90 or 80 are still most viable, aren't they? Or do YOU think that ONLY an I.Q. of 100 or better is viable.?

I.Q. has NOTHING to do with character, sense of morality or willingness to get along...NOTHING. People with average or 200 I.Q. can be vicious, amoral or immoral.

==========================================

Two articles from the Internet:

1. I.Q. is based on the average person being at 100. So the odds that someone would have an I.Q. of 25 would be the same as an I.Q. of 175.
To give you an idea, Einstein had roughly an I.Q. of 160. The chances of having a I.Q. of 25 is one in a billion. So it is hard to compare this with other humans, so we can compare with animals.
Dogs average I.Q. would be around 60, cats 50, mice 20. So that person would have similar learning capability as a mouse or rat. This would mean they would understand simple cues. So to teach them to add it would be very difficult because of memory loss, but if you would have to do it, do it with something they need to survive, because all humans have the will to live. (You can't measure I.Q. of animals, I'm just comparing them to humans)

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2. The Practical Significance of IQ

The average IQ of the population as a whole is, by definition, 100. IQs range from 0 to above 200, and among children, to above 250. However, about 50% of the population have IQs between 89 and 111, and about 80% of the population have IQs ranging between 80 and 120, with 10% lying below 80, and 10% falling above 120.

For IQs below 120, IQ is the best predictor of socioeconomic status of any psychometric measurement. In more complex jobs, IQ is better than even education or experience at predicting job performance. In her article "The General Intelligence Factor", Scientific American Presents "Exploring Intelligence", pg. 24, 1999, Linda Gottfredson states,

"Adults in the bottom 5% of the IQ distribution (below 75) are very difficult to train and are not competitive for any occupation on the basis of ability. Serious problems in training low-IQ military recruits during World War II led Congress to ban enlistment from the lowest 10% (below 80) of the population, and no civilian occupation in modern economies routinely recruits its workers from that below-80 range. Current military enlistment standards exclude any individual whose IQ is below about 85."

"Persons of average IQ (between 90 and 100) are not competitive for most professional and executive-level work but are easily trained for the bulk of jobs in the American economy. By contrast, individuals in the top 5 percent of the adult population can essentially train themselves, and few occupations are beyond their reach mentally."

"People with IQs between 75 and 90 are 88 times more likely to drop out of high school, seven times more likely to be jailed, and five times more likely as adults to live in poverty than people with IQs between 110 and 125. The 75-to-90 IQ woman is eight times more likely to become a chronic welfare recipient, and four times as likely to bear an illegitimate child than the 110-to-125-IQ woman."

=======================================

So, you see, an I.Q. of below 100 is not necessarily the worst thing in the world.