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Mrs. Big Picture’s Anecdotal Tales of Holiday Retail

Posted By Barry Ritholtz On December 20, 2006 @ 8:30 am In Consumer Spending,Economy,Psychology,Retail | Comments Disabled

When it comes to most things, I pay very close attention to what
Mrs. Big Picture says. She is, after all, much smarter than me, with gobs
more common sense and people smarts than I could ever hope to have. (I’m
what people derisively call "book smart," which is a polite way to say
that I am a social idiot). The
missus also has a very good antenna about all sorts of things. 

She never asks me to go shopping, cause she knows I hate malls and
crowds. Instead, she says "Let’s go do some economic research." Clever
girl.

Anyway, when she relates anecdotes with economic overtones, I pay close attention. This is such a story.

A broken nail led to a visit to the manicurist. The shop was relatively empty, and the gals got to talkin’. At the salon, Mrs. BP asks the salon owner how business is. Michelle responds "Very quiet." The shop has been slow enough that Michelle gets to go Christmas shopping during her lunch. Store traffic and crowds, she points out, are surprisingly sparse, given its less than 2 weeks to the 25th. And everything is on sale, with prices slashed.

One of the other ladies pipes in: She runs the catering arm of a local food store (Bernards) — and business is way off. Bernards is a terrific but very expensive specialty food shop — picture a small but higher end version of Whole Foods. 

A little context: we live on the North Shore of Long Island, in a nice, affluent little town, surrounded by even nicer, more affluent towns. We’re adjacent to Old Brookville [1] (2 acre zoning, Median house value in 2000 was $972,100!), Locust Valley (where Sabrina [2] was filmed) Mill Neck (where the $40 million home of disgraced Global Crossing exec is found). This background is to show that this isn’t a tale of middle class woes [3].

The story gets me thinking — this is so consistent with what we have heard from from the major retailers, but not what the Commerce Dept. claims — so I start asking around: 

My train commute in is mostly Wall Streeters, Lawyers, Advertising, Bankers. I relate this story to one of the women is regularly sit with. Her answer? Shoes.

"See these pumps with the baby jane straps [like I have a clue]? They are Tahari. Fairly expensive. Got ‘em on sale this weekend at Lord & Taylor. 40% off, plus they mailed me a 20% off coupon. Usually about $120-40 for them. I paid $46 bucks."

I speak with my friend, who owns a very high end Audio Video store on Park Avenue. The equipment is gorgeous, and if you ever want a pair of $60,000 speakers, this is the place.

I ask: How’s biz?

"Way way off from last year. We typically see abotu $10-15k in walk in business, plus all the installs we do. Some of those are $100k plus jobs [I'm thinking -- 100k? Nice stereo!]. This year, we are seeing $3k a day walk in business. There ar eoccassional spikes, but its nothing remotely like last year."

I ask: What about all the flat panel displays on sale [4]?

"Not our clientele. We only carry super premium — Pioneer Elite [which is the only tv that has ever made me weep, its so gorgeous] and Fujitsu; Our customers are not buying the $999 Panasonic to go with their $30k in Krell Audio and $20k in Kef speakers [hmmm, drool].

He blames — wait for it — the housing slow down. He was doing so many installs into new or renovated condos, Hampton homes and Long Island / Westchester /CT / NJ residences, he could barely keep up. He was booked months in advance.  Today? "We can do an install in 2 weeks."

~~~

All the usual caeats about anecdotal tales apply: Perhaps its regional, or this is a non-random sample, biased, skewing one way or another. But these experiences, combined with what we have heard from Wal-Mart, Best Buy, Circuit City, and the truckers, etc., all add up to a Holiday shopping season that may be less than robust.

And, there are only 5 shopping days left until Xmas . . .


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2006/12/mrs-big-pictures-anecdotal-tales-of-holiday-retail/

URLs in this post:

[1] Old Brookville: http://www.ritholtz.com/blogMedian house value: $972,100 (year 2000

[2] Sabrina: http://www.imdb.com/title/tt0047437/

[3] middle class woes: http://bigpicture.typepad.com/comments/2006/10/middle_class_sq.html

[4] flat panel displays on sale: http://online.wsj.com/article/SB116658579046255448.html

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