Your Finances with Stephen Maltby
Many long-term residents of Amherst have difficulty grasping the rapid changes that both demographics and technology have made on local merchants. With the Traditionalist Generation (1922-1945) now ages 68 to 91 starting to pass away or be past their prime spending years we in the local market see a declining retail and service environment. Many have a hard time to see the forest through all the trees but the reality is the world has and will change.
Consider Amherst with a population of 9,700 and 33 per cent of the population now 55 plus we see rapidly changing trends and needs. A shrinking younger population with a median average income of $20,000 (provincially $29,500) is a real threat to any sales increases for local merchants. A higher then average low income level (19 per cent Amherst versus provincially 12 per cent) means less disposable income and more reliance on social assistance.
Growth of our population of any real substance is a pipe dream, not a practical prediction. Amherst was able to grow in the 40s as it was a place of employment. Much of our existence today came from families who moved there, many Acadian families who had large families and who became major contributors to our community. Communities in the past grew and survived because of employment and opportunities. Without these we will survive but will become retirement communities that will eventually decrease in size and prosperity.
Retail stores will always follow prosperity. Politicians, businesspersons and community leaders need to realize that education and job creation go hand in hand. The great opportunities that our young people in the west will not go away. Communities need to look at ways to create jobs that provide a living at a reasonable level. Many of the ways of survival have now changed. Gone are the mill and forestry jobs, the dairy and beef farms and some long term manufacturers. Many of our generations of entrepreneurs have cashed in and countless Provincial governments have taken significant provincial jobs away.
So what is the answer? Not a clear solution but rebuilding our communities is not much like being a Maple Leaf fan, The Stanley Cup is a few unpredictable years down the road. We need to centre our focus on building businesses that provide products that can be exported and at reasonable prices. We need to continue to provide employment training and increase our Community Education programs. The challenge in doing so is the tax dollars are stretched and committed to areas particularly health care. We will need to think outside the traditional box going forward.
For retailers, what does this mean? It means being very good at what you do and offering specialized services. Generation Y (1981-2004) will become the next generation of spenders. They are very technology savvy and would rather text and order online then drive to a mall. They are less loyal and worldlier then any previous generation. They are also so fortunate to be at a point in history, much like the 50s, where interest rates are historically low.
These are challenges we all need to consider as we evaluate where our traditional businesses are going. Over $895 billion in assets will transfer to the next generations over the next 10 years. As a businessperson one has to decide where the opportunities may be in servicing and selling to the vast richer generations ahead.
Many years ago one of my University professors told me businesses would have to recreate and reinvent themselves every 10 years. My gifted professor was only partially right, as we need to continually evaluate how we operate our businesses on a continuous basis.
Faith in our People, Pride in Our Products. We better start talking the talk and walking the walk.
Stephen Maltby is an Investment Adviser and Chartered Accountant with CIBC Wood Gundy. He has been in the financial services industry for more then 30 years and has held various accounting, investment and management positions with several accounting and investment firms over the years.He is in addition to his Advisor role a First Vice-President and Executive Director Atlantic Canada, CIBC Wood Gundy.