Today’s Courier Herald Column:
As I write today’s column, I’m safe and warm in my recliner at just after midnight. Based on my Facebook and Twitter feeds, however, many of my friends are in lines or shopping at various retailers who decided to jump the gun on “Black Friday”. They have decided to follow the quintessential American holiday of celebrating abundance through gluttony with the equally American concept of saving money by spending it. I frankly don’t see the appeal, but I’m not currently in need of a flat screen television, laptop, or game system.
The effort required to save on the hottest items seems to have a negative return on investment. Atlanta news stations were running reports on Wednesday about people who were already camped out in line. They chose to spend their Thanksgiving holiday – some with their families en masse – in tents outside big box retailers. I can only wonder how little someone would have to value their time or the Thanksgiving holiday itself to exchange 48 hours or more of time as well as significant creature comforts just to save a few bucks on electronic gadgets.
The retailers enjoyed the press, as anecdotally there appeared to be more buzz than usual about the early bird specials this year. This could be because many retailers chose to open at midnight Friday morning, with the nation’s largest retailer Wal-Mart opening at 10pm on Thanksgiving. Others remained open on Thanksgiving day.
Those that chose to camp out or rush to stores as soon as Thanksgiving dinner tables were cleared at least did so by choice. That’s the beauty of a free country. They can choose to use their time and battle traffic as they wish, and I reserve the right to slightly mock them for it. It’s a great system.
The possible losers under this system are the retail workers, who now must give up part or all of their family activities so that they can serve the marauding hordes looking to kick of Christmas shopping at a discount. While I’m sure there are more than a few who would have preferred not to go in to work today, there is some solace in that after three years of consumer skittishness, there are signs of consumers willing to open their wallets again – at the right price. That should at least aid their job security.
The American economy is a consumer driven one. Despite persistent high unemployment, those who have jobs are starting to feel a bit more secure in the ones they have or their ability to replace it if needed. In addition, Americans who have spent the past few years rebuilding nest eggs, paying down debt, and/or absorbing the reality that their homes are no longer the investment they had hoped are now in a stage of “pent up demand” for consumer purchases.
For those unfamiliar with the term, when consumers defer purchases and make do with what they have, the things they have eventually wear out. Cars eventually break down and clothes get frayed. One of the economic data points that has been most surprising over the past few quarters is new car sales. Despite wild market swings and warnings of a certain double dip recession, Americans are buying more new cars. After three years of relatively low purchases, many consumers are returning to dealers to replacing aging vehicles.
These purchases usually precede other consumer activity. Those that buy new cars tend to buy some new clothes so they can look good in it, and go out to dinner more as well. Consumer spending begets consumer spending.
The interesting thing is that consumers are developing this confidence despite the overall political tone with both parties blaming the other for deteriorating economic conditions, and with daily news reports warning Europe is on the brink of economic calamity. After three years of similar non-stop stories, the consumer seems to be largely tuning this out and returning to their normal routines.
As such, those retail workers who gave up part or all of their holiday probably deserve a holiday of their own. If Christmas retail sales match the anecdotal buzz for the season’s start, the economic recovery that has remained out of the reach of Washington politicians may be delivered at the hands of employees of Best Buy, Macy’s, and Target. While politicians everywhere will rush to claim credit, any potential near term recovery seems to depend much more on consumers completely tuning out what they hear from Washington and Wall Street.
It may be that these folks who have been standing in line outside stores today are fairly smart consumers after all.