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Black Friday at the Big Boxes

For reasons known only to members of the Fourth Estate, theres a big push this year in mass-media journalistic circles to use the label Black Friday to describe the day after Thanksgiving, when, historically, acquisition-maddened American consumers line up before dawn to start their annual end-of-year shopping spree. Its long been used in economics circles to describe the same day when, historically, retailers annual ledgers shifted, hopefully, from red ink to black. As I write this column it is Black Friday and while Im not out there contributing to the national velocity of money, many of my neighbors are. Theyre the reason why American consumption spending reliably equates to 70% of the Gross Domestic Product. So reliable is this percentage that professional economists agonize in writing over the fear that, say, housing-value drops or fuel price gains might disrupt consumer other-retail spending by even a fraction of a percent from the predictable 70. If you conclude from these known statistics that, absent a second Great Depression, nuclear winter (remember astronomer Carl Sagans doom-and-gloom predictions from the late 1970s?) or the imminent expertly predicted credit-card-melting global summer, Americans will continue to spend the same 70% of the economy on consumer goods and services, then you might want to reflect on the role of the big-box retailers in this consumption pattern. My opinionas befits an opinionated columnis that the antipathy to Big Box retailers, as some kind of a mortal threat to mom-n-pop retailers, is quite misplaced. Id argue quite the opposite: Because American consumer spending is so reliably predictable at 70% of GDP (the percent of personal after-tax income varies in proportion to income, but by the same logic turns out to be equally predictable) therefore, whatever the shopper saves by purchasing low-price goods at Wal-Mart, he/she then is driven by internal spending compulsions to spend at, say, Morty Gleebs Vermont-Made shoppe. No Wal-Mart, no Vermont-Made shoppe because when low-price consumer goods arent available, the money spent for necessities uses up the whole 70% and leaves nothing over for the mom-n-pop shops, or niche retailersif you prefer, to aim their discretionary-spending marketing efforts at. Therefore, it would seem to me that if you accept the paired notions that 1.) American consumers have deeply-ingrained spending patterns (its been the same 70% since, back when, Americans saved almost 10% of income, as it is now, when savings are in negative numbers) which arent susceptible to easy change; and 2). that American consumers have equally deeply-ingrained requirements for, say, dish towels, meaning that theyll spend what it takes to own them; then you should accept the conclusion that whatever they get to save on dish towels at a Big Box store (on the urban fringe with lots of free parking), theyll spend at the downtown family-owned bookstore from which theyll lug their purchases in designer shopping tote-bags to their metered parking spacemaybe, with luck, only a couple of blocks away. (Assuming there are enough parking spaces downtown to accommodate shoppers.) Its a statistical probability that you wont accept the conclusion: Political-science studies of voting patterns have shown a pretty uniform correlation between majority-liberal balloting and hostility to Big Box retailers; that pattern, therefore, would show up in Vermont counties like Addison and Windham, but not in counties like Essex and Orleans. Youd think, perhaps, given Vermonts demographics (now, one of the oldest-average-age states in the nation) that lots of voters who had grown up, as I did, with 6,000 square-foot A&P stores selling canned goods and not much else (after which the shopping journey went to separate greengrocers, butchers, and bakers shops) and in families which then spent 25% of their income on food, would like the idea of Big Box retailers. Today, middle-class people can one-stop shop at Hannaford Supermarkets where selections and quality are far greater and pricesadjusted for inflationare far lesser than in the Good Old Days; families now spend less than 10% of income on food. But, if you do think so, youd be wrong. Those who have benefited from it (sometimes when their peers arent watching) continue to object to the reality of Big Box shopping. My absolute inability to understand this phenomenon explains why I never had a chance in Vermont politics.

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