Canadian retailers greatly affect economy
June 29, 2012
Many economy factors influence the overall success of a nation's financial standpoint. Tourism, infrastructure costs and retail are particularly large areas that affect an economy.
A recent report revealed that a small contingent of Canada's most popular stores greatly influence the nation's entire retail economy.
Smaller businesses make the most impact on Canadian economy
According to a 2010 study published by Ryerson University's Centre for the Study of Commercial Activity, just 16 percent of Canadian retailers account for 75 percent of the nation's total retail revenue, which represents $220 billion in sales.
The Weston Group was found to be the most successful Canadian retailer, followed by the Canadian division of Walmart and Empire Company. The top three companies accounted for 23 percent of Canada's retail sales in 2010.
Lead study author Christopher Daniel explained market concentration of this sort is what primarily drives Canadian success in the global economy and leads to successful economies of scale.
However, a number of Canadian experts believe retailers in the northern country will face considerable competition in the near future. "The steady growth of foreign retailers, especially U.S.-based conglomerates, will provide an increasingly challenging environment for Canadian retailers, CSCA director Tony Hernandez warned. Hernandez noted that many popular American brands, such as Target, are set to expand their reach into Canada in the next year. The internet could also provide a growing problem as online sales increase in popularity.
Software used frequently by retailers
Accounting software is commonly thought to be particularly beneficial for offices and larger corporations, but retailers often use such programs to account for expenses and revenue. This may be particularly advantageous for Canadian retailers that have become such a large part of the country's economy.
Inc. Magazine reported such programs are often helpful at retailer points-of-sale, as the technology can help owners account for inventory and measure forecasted profits that can be used to stock shelves in order to drive sales.
In a small business question-and-answer column for the Houston Chronicle, SCORE business counselor Ron Consolino explained accounting software used by retailers can serve as a reliable indicator of success by using key performance indicators. For example, Consolino detailed, owners can view their cash stores by adding accounts receivable and cash and dividing by accounts payable, all of which are recorded by software.