Incomes, Not Values, Explains US-Canada Difference in High-End Retail Consumption

With another high-end American department store about to open in Toronto’s Eaton Centre this week, the New York Times today contrasts the retrenchment of department stores in the United States with their expansion in Canada. In addition to the new Nordstrom stores, it notes the expensive renovation of the Hudson’s Bay’s flagship store, located immediately south of the Eaton Centre, and the expansion of Quebec’s La Maison Simons into other parts of Canada.

A little irksome, however, is the resort to tiresome cultural comparisons between Canadians and Americans in order to explain differences between the retail markets of the two countries. The article, for example, cites the greater Canadian frugality to explain why Canada hasn’t had the same explosion of high-end retail shopping that the US has experienced in the past few decades. This assumes that consumers in each country are about equally wealthy. Of course, it was the New York times itself that did much a couple of years ago to hype the idea median incomes in the United States were falling behind those in Canada.

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“Falling behind” is a relative term, as the NYT’s own data demonstrates. The top 50 percent of American earners still do better than their Canadian counterparts.

The US middle class, the Times lamented, was falling behind Canada’s (an idea that did not go uncontested at the time). Whether this was accurate or not, the striking thing is that once you go above the median income, at which point Canada and the United States are relative equal, Americans in every decile (i.e. increment of 10 percent) above earn significantly more than their Canadian counterparts.

Surely the explanation for the supposed frugality of Canadian consumers when it comes to high-end retailers is this: Canada is simply home to fewer super-rich earners (and consumers) than the US. In 2010, for example, the richest 1 percent in Canada took home about 10 percent of the national income; in the US, they “earned” 25 percent of it. To break into the top 1 percent in Canada that year, you had to earn just $201,400; in America, $352,000.

The retrenchment of the high-end retail industry in the United States suggests the American market is oversaturated with stores like Nordstrom, Macey’s, and Saks. My bet is it will eventually happen in Canada, too, and probably more quickly than south of the border. And Canadian frugality will have nothing to do with it.

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Kaepernick Jersey-buyers Draw on another American Political Tradition—Consumer Activism

As many commentators have pointed out, in refusing to stand for the American national anthem and “show pride in a flag for a country that oppresses black people and people of color,” NLF back-up quarterback Colin Kaepernick has joined a tradition of black athletes who have used their fame to promote civil rights. But his actions have also provided his fans and supporters with an opportunity to engage in another storied American political tradition—consumer activism.

Consumer activism has deep roots in American history, stretching back to the boycotts of “baubles from Britain” in the lead-up to the American Revolution. Black civil rights activists have long spent (or refused to spend) their dollars in the service of their cause. Consumer activism was central, for example, to many of the key battles of the Civil Rights Era, from the Montgomery Bus Boycott to the lunch-counter sit-ins. More recently, the Black Lives Matter movement disrupted shopping on Black Friday—the busiest shopping day of the year in the US—to draw attention to police killings of African Americans.

Black Lives Matter Black Friday

NYC action in solidarity with Ferguson, MO, encouraging a boycott of Black Friday consumerism in November 2015. (Photo by The All-Nite Images licensed under CC BY 2.0)

The news that Kaepernick’s jersey is now the top seller in the NFL suggests a spontaneous, grassroots move by consumers to use their “purchasing power for justice” (to paraphrase the slogan of the League of Women’s Shoppers, an influential consumer organization of the 1930s and 1940s). The “buycott” of Kaepernick’s jersey has the support of some celebrities like Susan Sarandon (who recently tweeted that she was waiting for hers to arrive) but the spontaneous nature of the protest is striking. Continue reading