Posted on 12/30/2008 7:54:41 AM PST by Red in Blue PA
The dismal holiday shopping season may sink some retailers and could take down some U.S. malls struggling with rising vacancies, softening rents and their own large debt loads.
"This is probably going to go down as the worst season in history as far as retail sales," said Victor Calanog, director of research for real estate research firm Reis. "The difficulty of ascertaining what the effect would be at the property level is because we're already heading toward a train wreck."
At the end of the October, the International Council of Shopping Centers (ICSC) forecast that national chains would announce 6,100 store closings in 2008 and 3,100 in the first half of 2009.
(Excerpt) Read more at cnbc.com ...
From my reading, a consumer economy actually is generally more stable. (This, obviously, is a 100-year-type event.)
Consumer economies are much more agile, because they are not tied as much to infrastructure and labor. If consumers stop buying a particular thing or segment, the manufacturers take most of the brunt of that micro-downturn. If that occurs overseas, it has even less of an impact on the consumer economy.
In the meantime, people are rarely persuaded to stop spending, especially to the extent people have stopped discretionary spending at this time. Just doesn’t happen very often. And that’s just about the only thing that disrupts the sale of services.
They are helpful, but extrapolating from them to the global economy is nuts.
Next on the American landscape: Crack Malls
The malls in Florida and other hot climates may be the last to go, but they will go.
The vast majority of shopping will take place online in the future.
The former malls will be razed to make parking lots for the millions of UPS, FEDEX and yet-to-be-founded delivery company vans that will be necessary to move all the stuff. Also they will build massive post office box facilities, so people can have stuff delivered to a place where it is safe, dry, etc. and they can pick it up locally at their leisure.
Amazon did fine because it picked up some of the slack from people refusing to go to malls/other stores. But they didn’t save the day.
I don’t visit the mall much. I’m not a net consumer.
My daughter dragged (drug?) me to our nearest mall at Christmas and I was shocked to see how empty it was. There were plenty of people. Just not that many stores. A couple of Pittsburgh corporations were present there (Dick’s Sporting Goods and American Eagle Outfitters), but many chain stores have made their exit in the last year.
With the rents malls charge, you have to turn a lot of “merch” to make it worth your while to be there. The really high end vendors can’t afford it in a down economy.
I’m really expecting WalMart to become an anchor store in some of these joints.
OT but related.....I know how retailers had “horrible” Christmas seasons...but the dept store/food store near me.....Fred Meyer’s ...had fantastic sales....I know because I asked...the store was very busy and still was busy today.....
I am by no means an expert on the economy but will give my 2 cents anyway. (I am a FReeper so I can) I used to be a HUGE shopper. Very much like many Americans. Spent more than I should have.
The past few years, (especially Christmas) I have spent very little on presents, decorations and useless things.
This Christmas I spent next to nothing. Just food, very small tree and gifts for the small children in my family.
Christmas for me has turned into a celebration of Christ. Church services, good food and family. It was the nicest Christmas I can remember.
Anyway, long story short, I went to the mall on the evening of December 23 to buy a gift for Hubby's boss.
(I live in a highly populated area of Northern Calif.)
The mall was extremely empty. Shelves were full and no lines to speak of.
The last time I have seen the stores this way was during the Carter era. Actually this might have been worse.
I am sure on-line buying is up. But maybe not for luxuries. I buy things I need on-line for the deals. Pet food, toiletries, some food, etc...
I can't see how this economy is OK. I don't know if this is a manufactured false crises or if it is normal and expected with the flow of things.
But I do believe spending is down and going to get worse.
A return to the mom-and-pop storefront shops on Main Street?
They are talking about the “Dawn of the dead” movies where the surviving humans barricade in a shopping mall from the zombies. The zombies are said to stand for our brainless shopping culture. Both are excellent movies. Very thrilling!
http://www.imdb.com/title/tt0077402 (1978 original)
http://www.imdb.com/title/tt0363547 (2004 remake)
I didn’t know Amazon did groceries, but i would think if you are snowed in, they will have trouble delivering to you.
Local supermarkets could do grocery delivery, if there was enough of a market for it. Some might do so.
Grocery shopping is a very labor-intensive process, which wouldn’t have to be that way. You have a lot of small items you have to pick up, and you have to do it very often.
Traditional markets require the consumer to walk through an entire store, “stocking” their basket. Then the basket has to be unloaded, scanned, loaded into containers, loaded into the car, driven home, and unloaded.
I know some groceries have built scanners into carts.
But suppose you could select your groceries, and an automated system would box up what you ordered?
The problem is that for most people, the difficulty in using an automated system to pick out all of their groceries would outweigh the advantage.
But there is a lot of time to be saved, at least for those of us who aren’t intimately fimiliar with the layout of the grocery stores.
I seemed to me to be a good way to shop for groceries, I didn’t know major companies were still doing it.
Grocery shopping seems to be a major waste of time.
Well, they weren’t discouraged from spending this time until the entire government stood up and screamed “The Sky Is Falling”.
Maybe it was, but they sure took it down with the way they handled the “crisis”.
Good deal - three year extended warranty for me at Fry’s was $89. And I also got the same (unusual for Fry’s) ‘royal’ treatment. Fry’s is not noted for customer service and to get prompt and outstanding service there was quite the surprise.
Yes, that was part of it. But a greater part of it was checking one’s 401(k) (etc.) accounts and seeing they had dropped by 40% in one week. Then that effect was exacerbated by calling one’s mortgage company and asking about refinancing, and being told that it didn’t matter they had put over $150K down on their home, it didn’t matter that they had perfect credit and good income-—there was NO WAY to refi because their home value was 40% down from its purchase price.
No amount of “the sky is falling” from the government would have affected so many people had those two events not occurred to millions across the country in a very short timeframe.
“Sorry, I can’t help the retail industry, I am on a Capital Strike. I have to save my money for the tax increases that are coming.”
exactly - especially us New Yorkers.
If Obama doesn’t get us - Patterson certainly will.
I especially agree with you that there will be continued contraction in consumer spending-—maybe even permanently.
It’s kind of like when many people boycotted French goods after the French government tried to undermine the U.S. war efforts. After discovering that, yes, there are many good wines and cheeses in the world that do not cost an arm and a leg, many consumers permanently changed their buying habits.
France could become our next best friend, but if you’re now happy drinking Australian wine and eating Brie from Wisconsin, sorry, they lose.
Once the “retail Christmas bubble” starts to pop, it will accelerate. The craziness was unsustainable. Without retail Christmas, the whole business model of retail will have to change. Merchants will have to make it on what they sell throughout the year, with no banking on a huge two-week buying period.
Of course, as Christmas becomes more and more completely about family and, for some, faith, there will be room (time, money and energy) for other holidays to start their run toward the cycle of inevitable excess. (Halloween is just about done with being a children’s event, for example.)
“Holidays” such as Super Bowl Sunday will get a little more oomph. Already grocers really notice increased sales for SBS. Since that’s a friends and family eating event, it will probably continue to get a little more elaborate over time.
You really think that there is a source of information available that is not pushing somebody's agenda? Please tell me where?
You said — “You really think that there is a source of information available that is not pushing somebody’s agenda? Please tell me where?”
Ummm..., you think businesses will want to deal with information that is “politically correct”?? LOL..
If there’s one thing that they’re gonna want is that they got some numbers that they can make some true evaluations from, so that they know how to plan for the future and to see *actually* what they have done in the past (according to sales programs and the results from the same).
NOW..., if we were to take the assumption (stated here) that there is no information that is not slanted and there exists “no truth” (in business or otherwise) that can ever be depended upon, because “such a thing” cannot be done — then you’ve “bought into” the fallacy of “post-modern” thinking in which there is no truth, truth cannot be known and truth is only what the receiver thinks it is... LOL...
Good luck with that type of thinking...
I am a post modernist in the same sense that Diogenes was. He spent a lifetime looking for an honest man, and failed. It is not that there is no such thing as truth, but finding a source of it which can be trusted without a chance of error or deceit is like investing with the impeccable Bernie Madoff.
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