This Christmas, divest from retail

On the first day of November my daughter remarked: "I can't believe it's almost Christmas." 

Granted, the new-fallen snow had some effect on her psyche, but I rarely start the Christmas countdown as early as November 1. It's just too early. Wait at least until Remembrance Day. 

I may be in the minority. Many stores are already pushing their Christmas goods in October and I've noticed front-lawn Christmas angels are now competing with Halloween ghosts and ghouls. This is what's become known as Christmas creep, the earlier and earlier arrival of the season of selling things.  

In Canada the creep is worse because our Thanksgiving is so early. And the snow... don't forget about the snow. Retailers love it when it snows because that's when the public (my daughter being a prime example) gets Christmas lodged in its collective head.  

For about three months we get bombarded with one sales event after another. There's Black Friday, an event that kicks off the gift-buying season in the U.S. but is just another excuse to shop in Canada. There are the pre-Christmas sales that follow Black Friday (it feels sooo good to get a 50% discount even if the retail price is double what it should be). And then there are the weeks of Boxing Day sales that stretch into mid-January. Retailers are trying to squeeze as much out of us as they possibly can.  

Because they're struggling. Financially, many big retail stores are crippled by debt that started in the Great Recession. How else do you explain Toys R Us going out of business? In the city where I live, the store is busy even in the middle of July.  

Sears has gone under and our iconic Hudson's Bay is following a similar path. Over 21 big retailers in the U.S. closed stores this year. A big part of it, of course, is the Internet, that wonderful technology that allows us to buy in the comfort of our home. This will be the first year that online spending in the U.S. will exceed the amount spent in physical stores. Amazon is set to capture 44% of those e-commerce sales. 

That vast expanse of department store space is suddenly a liability. Ever walk around Sears as a kid and feel like you'll never get out? This is normal. It's a type of officinaphobia, or fear of shopping. As an adult I still feel this way as I meander through the racks of bargain clothing clogging the aisles. (That being said, I will miss the normally deserted Sears appliance department... It was heavenly.) 

The closing of Sears, among others, is a sign of things to come. Retail space per capita in the U.S. is higher than in Canada, so we can expect more closures south of the border. But as we've seen with Toys R Us, the impacts are global. I'm not a financial adviser, but if you're heavily invested in retail, it might be time to divest. 

Especially Target. I heard their expansion in Canada hasn't gone so well.