Thursday, January 6, 2011

Thw Decline and Fall of American Consumerism: The View from the Trenches (Part V)

The weather the past few days has been unstable. Both yesterday and today it appeared as if it might rain were we to go to the beach. So Alma and I have spent the past two days doing our 90-minute trek at the Westfield Culver City Mall.

Now that the holiday shopping season is over, we have seen four stores in the mall either close their doors or appear close to doing so: Debue (a women's clothier), Up Against the Wall (an urban clothier), Brookstone (electronic gadgets and household sundries) and Utopia (home furnishings). At least three other stores show signs of being on their last legs and about ready to fold up shop. So, all told, I would guess that between 10-15% of the retail outlets in this mall (but really only about 5-7% of the retail floor space) did not make the Christmas 2010 cut.

Alma and I have been debating what this portends. She says the fact that most retail outlets remain open means that the sky is not falling, my earlier prognostications notwithstanding. I am not sure what to make of it -- I suppose Alma is correct that a certain amount of retail turnover is to be expected in the normal cycle of American consumerism. Alma also points out that the Westfield Culver City mall does not exemplify the norm in SoCal retail shopping. A mall like the Westside Pavillion or the Beverly Center probably captures the more upscale demographic on the west side of Los Angeles.

Still, when the Thompson Reuters December 2010 Same Store Sales figures were released this morning, showing lackluster and tepid sales growth by retail stalwarts like Target and American Eagle Outfitters in same-store sales during December, I was not entirely surprised. Our walks in the malls during December suggested that, while there was plenty of foot traffic, there were not a tremendous number of shoppers carrying bags of goodies. (At least not until the week before Christmas, when activity seemed to pick up.)

Now that the Republicans have taken control of the House in D.C., I forsee at least another two years of stagnation. The 10% unemplloyment rate is highly likely to remain and may even worsen if the Repupublicans' fiscal cuts are enacted into law. When private sector demand falls, government simply must make up for that demand with increased government spending or aggregate GDP will fall. What this portends for the ranks of the unemployed (myself included) are extended bouts of joblessness.

However, I consider myself as having two or three jobs right now, just none with a regular paycheck. First of all, I manage our investments in our retirement and brokerage accounts. Second, I manage Alma's art website and business. Finally, I look for a job with a steady paycheck. I shall have more to write on each of these three endeavors in the days and weeks to come. I suppose my fourth job is documenting here the records of the three jobs mentioned above. All in all, it's enough to keep me busy and to keep the depression that can come from unemployment away.

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