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Thursday, November 11, 2010

Observations from a Stroll at the Mall

 Last night I decided to visit my local shopping mall.  I had not visited since early autumn and was curious to see if holiday decorations and such had been set up since it would be unlikely I step foot there again between now and Christmas.  I felt in good spirits when I entered the mall and felt quite saddened when I left..   Some thoughts and observations..

1)  I visited a couple department stores and looked at various clothing.  I found myself drawn out of curiosity to check the labels- not for size or proper wash care- but where the article of clothing originated from.  At first it was humorous, like a little game one might play out of boredom, but it quickly lost its luster.  Every article of clothing I looked at..shirts, jeans, shoes, gloves, jackets,etc..  every designer- made outside the US.   Clothing made in some countries I expected and some I honestly would have a challenge finding on a map-  China, Philippines, Madagascar, Vietnam, Thailand, Jordan, Egypt, Mexico, Honduras...  on and on.  And some of these clothes were $150 dress slacks, $300 sweaters and $500 winter jackets.

Considering that some of the workers of these nations get pennies a day and no benefits, and its not as if the clothes are made from strands of 24k Gold, I was having a difficult time understanding how some of these clothes could command top dollar.  Well, other than the fact that those at the top wanted to keep a larger profit margin for themselves by having its clothes made in Sri Lanka or Bangladesh.  Less advantageous than to use American workers,  make a smaller profit but do their civic duty to help keep a nation's manufacturing base alive.  Really makes one wonder what is the point of supporting an American designer like Ralph Lauren and Tommy Hilfiger when they do nothing within their business model to support Americans. 

2)  The mall was fully decorated for Christmas- lights and ornamentation, tress, 'Santa's Workshop' and such.  The vast majority of stores had a Christmas or holiday motif to it with the exception of a couple places like LensCrafters who told me when I stopped in and asked, that their business actually goes down during the holidays because people are usually putting off getting glasses in order to buy other things and its not the type of thing you buy for another, so there wasn't a need to decorate the store any differently.

The sales were already in high gear as well..  plenty of buy 1, get 1 50% off type enticements to get people to spend early and often.  The mall was very quiet when I walked around last night.  I am quite sure that by Black Friday, the day after Thanksgiving, the Mall will be packed and probably stay that way for another 4-5 weeks.  That said, I got the feeling that if stores could have generated Christmas excitement back at Labor Day and somehow kept the exuberance of the holiday season going, they would have most happily done so.  Many of the smaller stores I popped into had no customers at all- and this was around 6:30-7p.  Often I'd observe employees doing anything possible to alleviate boredom including chatting with co-workers they'd probably not converse with under normal circumstances.

3)  I believe this year will be a make it or break it year for many malls, and retail stores on the whole.  There has been a desperate attempt by government, media and the retail industry to convey the impression that we are in recovery and have been so since June, '09 so everyone go back to normal pre-recession spending habits.   Wishful thinking can only go so far- when you're out of work, it means either no income is coming in, or the unemployment benefits are so limited, one can barely eek by without eating into lifetime savings.

 When people's credit card lines have been slashed or applications for cards rejected, and/or when the interest is so high that a larger amount is required as minimum payment, it limits what a person can do in terms of shopping.  People are very resourceful and with the exception of the truly rotten, will not deny their children presents, but if people curtail their shopping budgets or limit expensive purchases due to thrift or survival, it affects everyone from the retail merchant to the mall itself. 

My predictions--

1)  Malls will still see large crowds on a daily basis during the Christmas season but overall, the number of people carrying bags around (i.e. purchasing) will be down this year compared to last year. The media and those who benefit from a strong shopping season will distort reality and paint a rosier than reality picture.  Be prepared for the onslaught of 'great' shopping news for the next 6 weeks, then the real numbers will be released in January showing an average to below-average retail season.

2)  Retail stores will do everything humanly possible to avoid giving real sales and discounts to customers so that they aren't conditioned to expect it. So they'll push the 'Buy 4, get 1 at 25% off' type nonsense and hope enough people bite.   Whether or not sincere good deals are offered for the last week before Christmas will be determined by how well collectively people can hold out making purchases. 

There is no true 'After Christmas' sale anymore- stores are so desperate not to hold on to holiday merchandise, they will drastically lower seasonal items as the month of December progresses.  As it is, I saw many stores mark down their Christmas items 40%- imagine the profit margin for a store to be able to do that in mid November.

3)   Shoppers who go overboard this Christmas season and do not have the means to pay off their cards in full in January are going to suffer badly because of it.   2011 is expected to be another economically rough year.  Many states, cities and municipalities are financially strapped for cash and in all likelihood will need to raise property, income and sales taxes.   In addition, utilities such as electricity, water and gas will be going up.  Be Smart when you shop..  Life continues on December 26th

4)  Anyone who understands the true spirit of Christmas will have a wonderful holiday regardless of their economic circumstances and know to put priorities in the right places.  The greatest gifts one can give another person are usually free.

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