Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Tuesday, September 23, 2014

Economy Shifting Gears To Service The Rich: CIBC

The world’s businesses are shifting gears to take advantage of the growing gap between rich and poor, and that means more services and products for the biggest earners, CIBC said Friday in a client note.

CIBC chief economist Avery Shenfeld summarized the lessons learned at a recent CIBC investors’ conference in Montreal, and what he found is a commercial environment increasingly focused on serving the wealthy.

“With the rich getting richer, a growing number of businesses are seeking growth from those with money to spend and money to invest. Beefing up private wealth management and mutual fund arms, in both the U.S. and Canada, is front and centre for both Canadian banks and insurers,” Shenfeld wrote.

But it’s not just banks. Case in point: American Airlines this week announced it’s launching a new ultra-first class section on flights from L.A. to New York and San Francisco.

For a fare that can top $8,000, passengers are treated to “private berths, three-course meals boasting shrimp scampi and even vented compartments that can house socialites’ chihuahuas,” Bloomberg reports.

This trend towards catering to the very rich has a flipside: A renewed emphasis on low-price brands for low-income households as the middle class hollows out. The trend has been apparent in the U.S. for some years, but evidence is mounting that it’s coming to Canada as well.

In a report earlier this year, CIBC noted that Canada’s consumers are increasingly segmenting into rich and poor. The economists saw that as good news for upper-tier brands like Saks and lower-tier brands like Dollarama, but bad news for the stores catering to the middle-income crowd, the Searses and Targets of the world.

Recent news on the retail front seems to bear out this assertion. As Sears busily closes stores and Target struggles to stanch the bleeding from its troubled expansion into Canada, Dollarama is raking up record earnings and planning to add another 1,200 stores in Canada over the coming years.

CIBC’s Shenfeld sees plenty of other places in the consumer economy where catering to the rich will become a big deal. One is cinemas — "movie chains adding luxury theatre options at higher prices" — and another, maybe surprisingly, is telecommunication services.

“With the federal government undertaking what it sees as a populist drive to lower prices and increase competition, industry players appear to be looking to offset that with service options that would appeal to those with discretionary spending room,” Shenfeld writes.

“Pay for fewer cable channels? That’s OK, we’ll get you to buy more data to feed your appetite for watching movies and sports on the go.”

Among other lessons learned at the investors’ conference, Shenfeld notes that technology is still a major driver of change in the business sphere.

“In financial services, it’s about efficiently reaching customers with a broad product offering. In media, it’s about responding to Netflix, the iPhone, and other channels. For newspapers, it’s about how to respond to online news sources that have engendered a ... decline in readership,” Shenfeld wrote.

Original Article
Source: huffingtonpost.ca/
Author: The Huffington Post Canada | By Daniel Tencer

No comments:

Post a Comment