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Lecture 12

GGR252 Lecture 12

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Stephen Swales

April 1, 2014 GGR252 Lecture 12 - Market (demand) changes and retail supplier responses o Population size  P2 = P1 + (B-D) + (I-B)  Canada benefits from both natural growth and migrant growth, unlike undeveloped countries which only benefits from natural growth o Population distribution  Focus on longitudinal planes  Small number of major urban regions within Canada  15 of the 33 CMAs are in Ontario, which are mostly in the Golden Horseshoe  Focus of the population in a few areas  Even though there is a general market that the retail supply will aim at, there is still a regionalization of the market  E.g., SDM will work in any of the markets and it is easy for SDM to address all of the markets in the same way, but there is still regional distinctiveness to the markets  E.g., TV commercials reflect regional differences  E.g., McDonald’s works everywhere, but the menu might be different  General market perspective  Regional market perspective o Income (↑)  Lower and higher income groups have grown in number  Middle income groups have weakened in terms of relative proportion of the population (e.g., less growth)  Family household market was the traditional target for lots of organizations  Younger adult households with low income  Elderly households on fixed incomes  Suppliers must address different kinds of markets within different income groups  More sensitive to different income groups o Household size (↓)  Evident in most major markets  Proportion of the households are increasingly single person  28% of all household stock (not population) are single person households  Single elderly person living alone is more likely to be female  Reduction in average household size  Reflection of the shift away from big baby boomer households  Baby boomers failed to reproduce themselves  Supplier response  Lost the traditional family household, but still a significant market  All of the small households still have to be supplied o Small in size, but large in number  Change in supermarkets o Traditionally big supermarkets in suburban setting to appeal to traditional family household o Change to many formats, many scales, and central sites  Large proportion of the market will not be driving if located in a central site  More prepared foods that appeal to one person  More upscale supermarkets (e.g., Pusateri’s, Whole Foods)  Ready-made meals  Response to increase in income  Response to change in household size and lifestyle  Attempt to appeal to more diversity o Age (older longer, “grey”)  Relatively youthful population  Growth of the aging population (e.g., moving into retirement age cohort, or working part-time)  Older population has different demand profile  Household requirements  Healthier than previous generations  Mixed income  Many are well-off when they retire compared to previous generations o Female participation (↑, “pink collar”)  Not having large families when working  Income implications  Independent? Couple?  More time spent shopping  More responsibility, still o Diversity (↑)  Ethnic  Retail chain appeals to a general market, regardless of ethnic group  One isle might be devoted to an ethnic group o Some sensitivity  Growth of retail chains that appeal to one ethnic group (e.g., T&T)  Growth of ethnic retail strips (e.g., independents) o BIA  Independent, but some level of management  Appeal to some level of diversity  Themes (e.g.., historic, gay, villages)  Bloor Street West was the first BIA o “New” lifestyle consumer groups  Green  Environmentally friendly products  Organic products  Gay  Neighbourhoods  Grey  Aging group o Mobility (↑)  Private sector (retail) supply or public sector supply increasing anticipates that the market that they are serving is more mobile  Smaller number of hospitals  Small number of big stores  People must travel further to fewer destinations  Some people will be disadvantaged or left out if they don’t have good mobility, es
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