http://www.canada.com/business/fp/posts+first+loss+since+1993+writedowns/1642688/story.html
Summary
Until the days that the recession comes to an end, the outlook for banks is not very brigth. But the chief executive of Royal Bank of Canada, Gord Nixon, is hopeful in thinking of the future with the fatter margins, higher interest rates and less competition with other banks. “You’re going to have a repriced balance sheet and a much better pricing of credit. You’ll see margin expansion… the pricing of assets has become more attractive,” the chief executive predicts. On Friday, RBC posted their first lost since 1993. As Canada’s largest bank, they had a net loss of $50-million compared to last year’s profit of $928-million. RBC has been expanding over the past few years into the United States, which has proved to be a bad decision with US’s economy worsening quicker than Canada’s. RBC’s operations in the US are mostly in the southeast where the housing market meltdown is definitely at its worst. Analyst, Jim Bantis, notes that the bank’s impaired loans are increasing as with loan loss.
Connection
Banks operate just like a business; they provide services to consumers. Just like a business, they would like to make a profit. As we learned in our Accounting class and in Chapter 14 of our textbook, banks are vital in our economy. They provide the safekeeping of each individual as well as each business’ money. Without their doing so, money could not be stored in a safe location, and this would result in businesses and individuals worrying about their cash. But the safekeeping of money is just a small part of what banks offer. RBC, just like any other bank, lends money out to businesses and individuals as well as issuing their bank credit card. The main reason why the RBC had a net loss this year is because they weren’t able to retrieve the money that they lent out due to the economic recession. With businesses doing poorly, they are not as likely able to make enough revenue to pay off their loans from RBC. When a lot of businesses do poorly and RBC isn’t able to collect the loans, they, themselves, get into hot water, resulting in their net loss of $50-million. The article that I based my blog on is written based on a financial statement, which we learned how to analyze in Chapter 15. I would assume that the writer collected their data from a comparative financial statement, where RBC’s figures from last year were put side by side with this year’s.
Reflection
Knowing that even one of Canada’s biggest banks aren’t doing so well during the times of recession really has me worried. Comparing this year with last year, there is definitely a huge difference. I’m wondering. What happens to the loans that RBC, or any other bank, lends out to businesses that go bankrupt? Are they the reason that the bank went into net loss? All those loans not being able to be collected. Just how many businesses had to go into bankrupt in order for RBC to have a net loss of $50-million? With that many businesses going bankrupt during the recession that would mean more jobs being lost. When unemployment rates soar, this adds burden to the government. Workers have a deduction on their pay stub, which is called unemployment insurance, where they have to pay a certain amount to the government, as we learned in Chapter 16. Although both the employee and the employer contributes to the unemployment insurance fund, the government is the one that is ultimately issuing money to those unemployed. So this ripple effect of businesses closing down, not only affects banks, but also the workers and the government.
Saturday, May 30, 2009
Monday, March 23, 2009
Chapter 16: Vancouver needs a plan for the recession
http://www.vancouversun.com/news/Vancouver+needs+plan+recession/1404421/story.html
Summary
Vancouver City Council sees the recession as a serious matter and has decided to take matters into their own hands by setting their priorities in place. They have decided that their main concerns were “establishing a mental health advocate, enhancing child care support, and creating a green grants fund”. It was suggested that residents of Vancouver could face a potential property tax increase of more than 11% but city staff have already did some calculations and decreased the increase to 6.3%. City Manager Penny Ballem is already aware of the fact that as taxpayers lose their jobs, they’re hopelessly watching the value of their property decrease, so that’s why Ballem has imposed a hiring freeze at city hall. There is a need for stopping hiring because two-thirds of the city’s operating budget is used towards payroll. Despite the hiring freeze, there are exemptions for any unfilled positions that are sufficient in operating the city of Vancouver. Right now they have in mind a basic recovery plan that will keep taxes low, improve the efficiency of city services and encourage the kind of investment that will create jobs. Such plan includes: cutting spending, introducing zero-based budgeting, using benchmarks, keeping taxes low, and encouraging investments.
Connection
Learning about payroll in Chapter 16, we can relate this article directly and indirectly to the income of the city workers as well as the taxpayers. All over the city, the nation, and even internationally, workers are experiencing lay-offs from their jobs due to the recession. Citizens retrieving their pay checks will notice that their net pay (the amount they are paid) is not equal to their gross pay (the amount they earned before any deductions were made). After determining your gross pay, the employer has to make a whole bunch of deductions which include Registered Pension Plan, Union Due, Income Tax, Employment Insurance, Health Insurance, etc. The deduction for Employment Insurance is for when someone gets laid off from work or they are unable to work due to various reasons that could include health issues. But to tie in with our article, we will take into consideration that the workers have been laid off, which is very common because of the recession. While the worker is at home searching for a job, they are entitled to receive Employment Insurance because they have contributed to it while they were employed. Now that they are unemployed they can have the benefit of a slight income during their transition from the last job to the next.
Reflection
It is very wise of our country to have the workers pay Employment Insurance. This is extremely beneficial to workers that are out of job and out of income to support themselves and their family. So by having the government take a portion of their gross pay each pay period, although it may sound dumb at the time, is actually for their own good. Since while they were employed they contributed to the Employment Insurance fund, now that they are unemployed they will be offered payments out of this fund to assist them as they seek for a job.
Summary
Vancouver City Council sees the recession as a serious matter and has decided to take matters into their own hands by setting their priorities in place. They have decided that their main concerns were “establishing a mental health advocate, enhancing child care support, and creating a green grants fund”. It was suggested that residents of Vancouver could face a potential property tax increase of more than 11% but city staff have already did some calculations and decreased the increase to 6.3%. City Manager Penny Ballem is already aware of the fact that as taxpayers lose their jobs, they’re hopelessly watching the value of their property decrease, so that’s why Ballem has imposed a hiring freeze at city hall. There is a need for stopping hiring because two-thirds of the city’s operating budget is used towards payroll. Despite the hiring freeze, there are exemptions for any unfilled positions that are sufficient in operating the city of Vancouver. Right now they have in mind a basic recovery plan that will keep taxes low, improve the efficiency of city services and encourage the kind of investment that will create jobs. Such plan includes: cutting spending, introducing zero-based budgeting, using benchmarks, keeping taxes low, and encouraging investments.
Connection
Learning about payroll in Chapter 16, we can relate this article directly and indirectly to the income of the city workers as well as the taxpayers. All over the city, the nation, and even internationally, workers are experiencing lay-offs from their jobs due to the recession. Citizens retrieving their pay checks will notice that their net pay (the amount they are paid) is not equal to their gross pay (the amount they earned before any deductions were made). After determining your gross pay, the employer has to make a whole bunch of deductions which include Registered Pension Plan, Union Due, Income Tax, Employment Insurance, Health Insurance, etc. The deduction for Employment Insurance is for when someone gets laid off from work or they are unable to work due to various reasons that could include health issues. But to tie in with our article, we will take into consideration that the workers have been laid off, which is very common because of the recession. While the worker is at home searching for a job, they are entitled to receive Employment Insurance because they have contributed to it while they were employed. Now that they are unemployed they can have the benefit of a slight income during their transition from the last job to the next.
Reflection
It is very wise of our country to have the workers pay Employment Insurance. This is extremely beneficial to workers that are out of job and out of income to support themselves and their family. So by having the government take a portion of their gross pay each pay period, although it may sound dumb at the time, is actually for their own good. Since while they were employed they contributed to the Employment Insurance fund, now that they are unemployed they will be offered payments out of this fund to assist them as they seek for a job.
Wednesday, March 4, 2009
Chapter 15: Cell phone industry seen facing more trouble
http://www.canada.com/business/fp/Cellphone+industry+seen+facing+more+trouble/1616132/story.html
Summary:
Researcher Gartner claims that demands on cellphone will not recover until late 2010. The Reuters data show that the industry will suffer the worst quarter ever during April-June. During the first quarter of 2009, the industry fell 8.6 per cent. Gartner said, "We do not expect demand to get better before second half of 2010." According to research firm CCS Insight, in the first quarter, handset companies sold 14.3 per cent fewer phones than a year ago. Gartner which tracks the changes in inventory and the actual sales to consumers said that retailers sold about 25 million phones from inventories during the first quarter. It is expected that inventory reduction will continue during the second quarter but at a slow rate of about 10 million phones. Despite the decreasing inventory, there aren’t clear signs of improvement on consumer demand. The trend in Europe is that consumers are opting for cheaper monthly plans or even prepaid phones rather than yearly contracts.
Connection:
Inventory is piling up in the cell phone industry as this article clearly lets us know. This can be related to inventory turnover. Inventory turnover is the number of times a business has been able to sell and replace its inventory in a year. We learned in Chapter 15 that having a high inventory turnover is a good thing. It is a result of the company being able to sell much of the products that they have in stock. The formula for inventory turnover is cost of goods sold divided by the average merchandise inventory. Although in this article we aren’t given numbers, we can assume that the cost of goods sold is the same as the previous years. As for the average merchandise inventory, it is safe to estimate that the numbers are a lot higher compared to previous years, since the article says that companies sold 14.3 % less this year. Take a look at the equation for inventory turnover, the numerator (cost of goods sold) is the same and the denominator (average merchandise inventory) has increased. In this scenario, this would result in a small number for inventory turnover. But we learned that it is bad for the company to have a small inventory turnover.
Reflection:
I understand why the mobile industry is suffering and inventory levels are increasing as time goes by. We can blame it mostly on the economic recession. Citizens tend to hold onto the money they make and are less likely to go shopping. This results in inventory. When inventory piles each fiscal period or even each quarter, it has a negative effect on the company. Having last year’s model in stock and in large quantities just keeps on costing the company. It takes money from the company both by occupying space, which takes away room for newer models, as well as increasing the company’s expenses by not selling. When dealing with inventory turnover, it is ideal for the company to have a high turnover because that would mean that the company is producing just enough and not too much products to keep in stock. Although the cell phone companies wish to achieve this, they are currently not in this situation.
Summary:
Researcher Gartner claims that demands on cellphone will not recover until late 2010. The Reuters data show that the industry will suffer the worst quarter ever during April-June. During the first quarter of 2009, the industry fell 8.6 per cent. Gartner said, "We do not expect demand to get better before second half of 2010." According to research firm CCS Insight, in the first quarter, handset companies sold 14.3 per cent fewer phones than a year ago. Gartner which tracks the changes in inventory and the actual sales to consumers said that retailers sold about 25 million phones from inventories during the first quarter. It is expected that inventory reduction will continue during the second quarter but at a slow rate of about 10 million phones. Despite the decreasing inventory, there aren’t clear signs of improvement on consumer demand. The trend in Europe is that consumers are opting for cheaper monthly plans or even prepaid phones rather than yearly contracts.
Connection:
Inventory is piling up in the cell phone industry as this article clearly lets us know. This can be related to inventory turnover. Inventory turnover is the number of times a business has been able to sell and replace its inventory in a year. We learned in Chapter 15 that having a high inventory turnover is a good thing. It is a result of the company being able to sell much of the products that they have in stock. The formula for inventory turnover is cost of goods sold divided by the average merchandise inventory. Although in this article we aren’t given numbers, we can assume that the cost of goods sold is the same as the previous years. As for the average merchandise inventory, it is safe to estimate that the numbers are a lot higher compared to previous years, since the article says that companies sold 14.3 % less this year. Take a look at the equation for inventory turnover, the numerator (cost of goods sold) is the same and the denominator (average merchandise inventory) has increased. In this scenario, this would result in a small number for inventory turnover. But we learned that it is bad for the company to have a small inventory turnover.
Reflection:
I understand why the mobile industry is suffering and inventory levels are increasing as time goes by. We can blame it mostly on the economic recession. Citizens tend to hold onto the money they make and are less likely to go shopping. This results in inventory. When inventory piles each fiscal period or even each quarter, it has a negative effect on the company. Having last year’s model in stock and in large quantities just keeps on costing the company. It takes money from the company both by occupying space, which takes away room for newer models, as well as increasing the company’s expenses by not selling. When dealing with inventory turnover, it is ideal for the company to have a high turnover because that would mean that the company is producing just enough and not too much products to keep in stock. Although the cell phone companies wish to achieve this, they are currently not in this situation.
Monday, November 24, 2008
Chapter 14: Credit Cards Let Customers Travel the World
http://www.canada.com/story.html?id=795502&p=2
Summary
Many credit cards are offering travel reward points as one of their many perks. When selecting a credit card, its not only about the interest rates and affiliations, but rather the rewards that come with using that card. Travel rewards are one of the most popular ones out there for credit card holders. For each dollar spent, the Royal Bank Avion Platinum Visa Card gives one reward point. BMO Bank of Montreal’s Mosaik Gold Air Miles rewards program is being re-launched. Not only can card holders redeem more flights using less reward miles but the interest rates are slightly lower than most of the other cards. Scotia Gold Passport Visa’s best selling point is their flexibility. They ensure that “you can book flights on any airline, to any destination, at any time of the year, without blackout periods, limited seating or Saturday night stay restrictions”. Most of the credit cards that have travel reward programs charge cardholders an annual fee of usually $90 - $120. Some credit cards require a minimum annual income frequently $25,000 to $35,000 and most often give bonus points when you sign up.
Connection
This article connects well with what we’ve been learning in chapter 14 about how banks are involved in businesses and how a bank is actually a business of its own. One of the many revenues that enter a bank are the credit cards that they have associated themselves with. By offering their clients credit cards, they can charge interest fess, annual fees, and so on. But to attract consumers to get their bank’s credit card, they must offer perks to pull them into wanting to have that credit card. Different credit cards are trying different methods to draw in consumers so they can make more revenue. Even though credit cards are most often used at the time of purchase and swiped through a machine, I’ve heard that some credit cards also provide cheques, which could be very handy. By allowing cardholders to have larger amounts in their transactions, the bank benefits from this largely. If the cardholder fails to make their full payment, the bank is entitled to charge interest on the amount owing and continue piling on interest until the full amount is cleared. Credit card agencies bank on this deficiency of the clients in order to make prodits, as they charge high interest rates for delayed payments.
Reflection
Even though I am not of age to have a credit card, I know which credit card I would like to have when I can get one. The reason why my father uses the credit card from President’s Choice because they offer reward points and once you reach a certain amount you can use those points and get something that will make you believe it’s worth it to be using a credit card from that company. Because my dad is a man like any other father and guys tend to be lazy, he likes to do his shopping all at one store. So when he heard about the credit card that is affiliated with SuperStore, he knew he had to get one. Once he collects a certain sum of 20,000 points I believe he can get $20 worth of grocery from SuperStore free of charge. This method that SuperStore uses works extremely well because they carry almost everything, which allows customers to easily accumulate points, thereby successfully luring them into the program.
Summary
Many credit cards are offering travel reward points as one of their many perks. When selecting a credit card, its not only about the interest rates and affiliations, but rather the rewards that come with using that card. Travel rewards are one of the most popular ones out there for credit card holders. For each dollar spent, the Royal Bank Avion Platinum Visa Card gives one reward point. BMO Bank of Montreal’s Mosaik Gold Air Miles rewards program is being re-launched. Not only can card holders redeem more flights using less reward miles but the interest rates are slightly lower than most of the other cards. Scotia Gold Passport Visa’s best selling point is their flexibility. They ensure that “you can book flights on any airline, to any destination, at any time of the year, without blackout periods, limited seating or Saturday night stay restrictions”. Most of the credit cards that have travel reward programs charge cardholders an annual fee of usually $90 - $120. Some credit cards require a minimum annual income frequently $25,000 to $35,000 and most often give bonus points when you sign up.
Connection
This article connects well with what we’ve been learning in chapter 14 about how banks are involved in businesses and how a bank is actually a business of its own. One of the many revenues that enter a bank are the credit cards that they have associated themselves with. By offering their clients credit cards, they can charge interest fess, annual fees, and so on. But to attract consumers to get their bank’s credit card, they must offer perks to pull them into wanting to have that credit card. Different credit cards are trying different methods to draw in consumers so they can make more revenue. Even though credit cards are most often used at the time of purchase and swiped through a machine, I’ve heard that some credit cards also provide cheques, which could be very handy. By allowing cardholders to have larger amounts in their transactions, the bank benefits from this largely. If the cardholder fails to make their full payment, the bank is entitled to charge interest on the amount owing and continue piling on interest until the full amount is cleared. Credit card agencies bank on this deficiency of the clients in order to make prodits, as they charge high interest rates for delayed payments.
Reflection
Even though I am not of age to have a credit card, I know which credit card I would like to have when I can get one. The reason why my father uses the credit card from President’s Choice because they offer reward points and once you reach a certain amount you can use those points and get something that will make you believe it’s worth it to be using a credit card from that company. Because my dad is a man like any other father and guys tend to be lazy, he likes to do his shopping all at one store. So when he heard about the credit card that is affiliated with SuperStore, he knew he had to get one. Once he collects a certain sum of 20,000 points I believe he can get $20 worth of grocery from SuperStore free of charge. This method that SuperStore uses works extremely well because they carry almost everything, which allows customers to easily accumulate points, thereby successfully luring them into the program.
Tuesday, November 18, 2008
Chapter 12: Auto Executives Plead for Emergency Aid
http://www.financialpost.com/news/story.html?id=970258
Summary
Three Domestic auto manufacturers beg for financial aid from both the Canadian and US government. Letting everyone know that if they can’t survive this crisis, it will ultimately be the average families that get affected and both countries’ economy will suffer a fair amount of damage. GM, Ford, and Chrysler all requested the legislators to “approve US$25-billion in emergency bridge loans”. In unison, the three representatives that appeared before the legislators claimed that if even one automaker goes bankrupt, the whole auto sector would crumble and a domino affect will arise which would result in a lost of jobs for millions of workers and ultimately lower government tax revenue. “ “What we need is liquidity because we’re bumping up against our minimum cash levels now, as is Ford, as in Chrysler,” David Paterson, GM of Canada’s vice-president of corporate affairs.” The auto sector is slowly declining. Over the past 15 years, 500,000 jobs relating to this industry have been lost for US workers.
Connection
To make it through the current economic crisis, companies need an adequate amount of capital to keep their company out of danger. By using various methods, one being cash discounts as we have learned in chapter 12, will temporary assist the company gain more capital which will hopefully keep that company out of crisis. Cash discounts are very beneficial to both the consumer and the retailer. By paying the bill earlier, the consumer will be able to save some cash and this guarantees that the company’s accounts receivables will be paid off. Even though cash discounts will help with the situation, it is only a temporary solution. These small payments are not enough to keep the company running forever. It would be wiser to think of another approach to maintaining that cash flow.
Reflection
Even though these three auto manufacturers are located in Detroit, if they actually do go bankrupt, they have a much larger impact than only in Detroit. A manufacturing company in one city may appear like there’s no connection whatsoever with another city half way across the country, but what if the parts that the auto plant uses is imported from that other city half way across the country? By closing down any one of the three auto manufacturers, there will always be something else that will be affected. Whether it be negatively or positively, no one can be sure until the incident occurs. As I have recently learned in Geography12, “A system is an interconnected set of elements”. In more simple terms, all systems are connected and if there is any disruption in one of the systems, this change will have effects on the other systems. So the representatives are correct in the sense that one auto manufacturer going bankrupt will cause an unbalanced system, which will also cause a dramatic decrease in jobs and affect the citizens.
Summary
Three Domestic auto manufacturers beg for financial aid from both the Canadian and US government. Letting everyone know that if they can’t survive this crisis, it will ultimately be the average families that get affected and both countries’ economy will suffer a fair amount of damage. GM, Ford, and Chrysler all requested the legislators to “approve US$25-billion in emergency bridge loans”. In unison, the three representatives that appeared before the legislators claimed that if even one automaker goes bankrupt, the whole auto sector would crumble and a domino affect will arise which would result in a lost of jobs for millions of workers and ultimately lower government tax revenue. “ “What we need is liquidity because we’re bumping up against our minimum cash levels now, as is Ford, as in Chrysler,” David Paterson, GM of Canada’s vice-president of corporate affairs.” The auto sector is slowly declining. Over the past 15 years, 500,000 jobs relating to this industry have been lost for US workers.
Connection
To make it through the current economic crisis, companies need an adequate amount of capital to keep their company out of danger. By using various methods, one being cash discounts as we have learned in chapter 12, will temporary assist the company gain more capital which will hopefully keep that company out of crisis. Cash discounts are very beneficial to both the consumer and the retailer. By paying the bill earlier, the consumer will be able to save some cash and this guarantees that the company’s accounts receivables will be paid off. Even though cash discounts will help with the situation, it is only a temporary solution. These small payments are not enough to keep the company running forever. It would be wiser to think of another approach to maintaining that cash flow.
Reflection
Even though these three auto manufacturers are located in Detroit, if they actually do go bankrupt, they have a much larger impact than only in Detroit. A manufacturing company in one city may appear like there’s no connection whatsoever with another city half way across the country, but what if the parts that the auto plant uses is imported from that other city half way across the country? By closing down any one of the three auto manufacturers, there will always be something else that will be affected. Whether it be negatively or positively, no one can be sure until the incident occurs. As I have recently learned in Geography12, “A system is an interconnected set of elements”. In more simple terms, all systems are connected and if there is any disruption in one of the systems, this change will have effects on the other systems. So the representatives are correct in the sense that one auto manufacturer going bankrupt will cause an unbalanced system, which will also cause a dramatic decrease in jobs and affect the citizens.
Monday, October 27, 2008
Chapter 12: The best cities for small business
http://www.financialpost.com/small_business/story.html?id=892376
Summary
According to recent analysis, big cities are not a good place to start a small business. Entrepreneurs are more successful in smaller cities than in the larger ones. Even though a lot of Canadians are concentrated mainly in the large cities, small businesses in these cities seem to be weighed down by the many taxes that the city places on businesses. “There are secrets to success, and the more you see start-ups and small businesses operating in your community, the better off the whole community is going to be,” Ted Mallet, CFIB’s chief economist says. CFIB (Canadian Federation of Independent Business) has set up a list of criteria that they evaluate the cities on. On that list of strong entrepreneurial success cities include a lot of cities from Saskatchewan, Alberta, and BC. It appears that Western Canada is better off than those cities in Eastern Canada.
Connection
In chapter 12, we’ve learned about cash discounts and allowances which could be applied to this situation. In determining which cities would be a good place to start small businesses, we can not neglect the actual business techniques that the owners use. Even if the city is a very suitable place to start a small business, the owners still have to come up with clever ways to attract customers. By having items on sale once in a while, customers are more likely to come into the store and have a look around and perhaps purchase something. When an item is on sale for 20% off, the bookkeeper has to include it in their books using the new account that we’ve learned – cash discounts and allowances.
Reflection
Sometimes small businesses can’t afford to have items on sale because they already don’t make a lot of profit off the products, but then there are times when they have to compete with the larger organizations that they just have to sell their items for less. Especially since the economy is going downwards, it’s a smarter decision for businesses to quickly sell whatever inventory they have at hand so they have more capital which will help their business survive the hardship. Having read this article, I’ve realized that it’s very true about how small businesses tend to not be able to survive the bigger cities. Because of the large competition in large cities, small businesses aren’t as likely to be able to survive.
Summary
According to recent analysis, big cities are not a good place to start a small business. Entrepreneurs are more successful in smaller cities than in the larger ones. Even though a lot of Canadians are concentrated mainly in the large cities, small businesses in these cities seem to be weighed down by the many taxes that the city places on businesses. “There are secrets to success, and the more you see start-ups and small businesses operating in your community, the better off the whole community is going to be,” Ted Mallet, CFIB’s chief economist says. CFIB (Canadian Federation of Independent Business) has set up a list of criteria that they evaluate the cities on. On that list of strong entrepreneurial success cities include a lot of cities from Saskatchewan, Alberta, and BC. It appears that Western Canada is better off than those cities in Eastern Canada.
Connection
In chapter 12, we’ve learned about cash discounts and allowances which could be applied to this situation. In determining which cities would be a good place to start small businesses, we can not neglect the actual business techniques that the owners use. Even if the city is a very suitable place to start a small business, the owners still have to come up with clever ways to attract customers. By having items on sale once in a while, customers are more likely to come into the store and have a look around and perhaps purchase something. When an item is on sale for 20% off, the bookkeeper has to include it in their books using the new account that we’ve learned – cash discounts and allowances.
Reflection
Sometimes small businesses can’t afford to have items on sale because they already don’t make a lot of profit off the products, but then there are times when they have to compete with the larger organizations that they just have to sell their items for less. Especially since the economy is going downwards, it’s a smarter decision for businesses to quickly sell whatever inventory they have at hand so they have more capital which will help their business survive the hardship. Having read this article, I’ve realized that it’s very true about how small businesses tend to not be able to survive the bigger cities. Because of the large competition in large cities, small businesses aren’t as likely to be able to survive.
Thursday, September 25, 2008
Chapter 11: The War on Retail Crime
http://www.canada.com/vancouversun/news/westcoastnews/story.html?id=feeb35bc-c991-4155-b09c-e6e0d11a7efd
Summary
Crime rates have always been steady. It doesn’t matter how well the economy is doing, there is always people who feel the need to steal. General manager of loss prevention at London Drugs, Tony Hunt conducts an interview with a shoplifter. With advancements in technology, retail stores are constantly upgrading their systems and adding new security features. London Drugs works hard to prevent shoplifting by following these phrases: ‘nowhere to hide’, ‘blast-proof glass’, ‘surprise, you’re on closed-circuit tv’, ‘you must be this tall’, ‘can’t crack the code’, ‘no clean sweeps’, ‘tested on thieves’, ‘shoplifters beware’, and lastly ‘so much to touch’. If retail stores were to use some of these strategies, shoplifting in their store wouldn’t’ be much of a problem.
Connection
When people think of theft in a retail store, everyone automatically thinks of someone stealing from the storefront. But internal thief is just as likely or even more so than external. Even though large stores like London Drugs use computers and scanners to keep records of the inventory at hand, it is very important that they do a physical count at least once a fiscal period. By doing so, the company can have accurate numbers on the quantity of their products that are still in stock. With accurate numbers, the store can determine when to restock as well as precisely provide consumers with correct information. Not only that, but once a precise number is determined, the accountant can accurately produce financial documents.
Reflection
Even though conducting a physical inventory count is very time consuming and tiresome, it is extremely beneficial to the company. Most companies take a lot of precaution to external shoplifting and often neglect internal thief. Having worked in retail before, I realize the importance of physically counting inventory to ensure the numbers the computers provide are close to the quantity that we have. Being an ultimate consumer, I would appreciate updated numbers when it comes to the quantities in stock in this or another location of the store. If I were given false information which led me to believe the store that’s at the other end of the city still had 5 more of the products that I want and, gullible as I am, I drive all the way there to find out that they in fact did not have a single one. Experiencing situations like this would annoy customers and eventually lead to decrease in customer loyalty which lowers sales and revenues.
Summary
Crime rates have always been steady. It doesn’t matter how well the economy is doing, there is always people who feel the need to steal. General manager of loss prevention at London Drugs, Tony Hunt conducts an interview with a shoplifter. With advancements in technology, retail stores are constantly upgrading their systems and adding new security features. London Drugs works hard to prevent shoplifting by following these phrases: ‘nowhere to hide’, ‘blast-proof glass’, ‘surprise, you’re on closed-circuit tv’, ‘you must be this tall’, ‘can’t crack the code’, ‘no clean sweeps’, ‘tested on thieves’, ‘shoplifters beware’, and lastly ‘so much to touch’. If retail stores were to use some of these strategies, shoplifting in their store wouldn’t’ be much of a problem.
Connection
When people think of theft in a retail store, everyone automatically thinks of someone stealing from the storefront. But internal thief is just as likely or even more so than external. Even though large stores like London Drugs use computers and scanners to keep records of the inventory at hand, it is very important that they do a physical count at least once a fiscal period. By doing so, the company can have accurate numbers on the quantity of their products that are still in stock. With accurate numbers, the store can determine when to restock as well as precisely provide consumers with correct information. Not only that, but once a precise number is determined, the accountant can accurately produce financial documents.
Reflection
Even though conducting a physical inventory count is very time consuming and tiresome, it is extremely beneficial to the company. Most companies take a lot of precaution to external shoplifting and often neglect internal thief. Having worked in retail before, I realize the importance of physically counting inventory to ensure the numbers the computers provide are close to the quantity that we have. Being an ultimate consumer, I would appreciate updated numbers when it comes to the quantities in stock in this or another location of the store. If I were given false information which led me to believe the store that’s at the other end of the city still had 5 more of the products that I want and, gullible as I am, I drive all the way there to find out that they in fact did not have a single one. Experiencing situations like this would annoy customers and eventually lead to decrease in customer loyalty which lowers sales and revenues.
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