The Hot Mess Just Doesn’t Compute Anymore

4 06 2017

Philadelphia

In the old days, two things were true:

(1) I had to walk 20 miles each way back and forth to and from school every day, uphill both ways, through a foot of snow the whole way, wearing tattered boots, and dodging carnivorous dinosaurs.

(2) Economists had these terms, “normal goods” and “inferior goods.”  A normal good was a product or service, the demand for which grew as GDP or national income rose, and fell as fell.  An inferior good, “inferior” in economic terms, not a moral judgment, was a product or service that did the opposite:  The demand for those fell as GDP or national income rose, and rose as fell.

So, here I sit, stumped, trying to figure out how both “normal” retailers and “inferior” retailers are falling on hard times.  We know about the struggles of the mainstream mall store anchors, Sears, Macy’s, J.C. Penney, Dillard’s.  But now, we find out that “inferior” Payless Shoe Source and Family Dollar are closing a bunch of stores.  The latter is an interesting case, and points to the paradox of all this.  As one could have predicted, FD grew like weeds during the Great Recession, as one would expect an inferior goods retailer to do during a recession.  If the economy is getting better, then it’s also predictable the FD would be doing worse.  But the normal goods stores are also doing worse.  Except for Wal-Martinez, and that’s largely because of its ubiquity.

So, what’s going on?  Does it point to some strange happenings in the economy?  Is the normal/inferior paradigm obsolete?  Or is it all Amazon?

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7 responses

4 06 2017
Kestrel

1) Ordering online is just more efficient.
2) Many Millenials with lower incomes are more prone to buy lower quantities of high quality stuff, rather than the same quantity of low-quality crap.
3) Who needs swimming pools, 4-wheelers, boats, barbecue pits, baby clothes, etc. when you just play video games with every free moment? Families need more crap and are prone to buy inferior versions if they have to. Singles don’t need to. The lower marriage and reproductive rate has got to be encouraging #2.

4 06 2017
countenance

“Lower quantities of higher quality stuff” started with my generation, and is most evident in things like coffee and beer.

4 06 2017
Joshua Sinistar

Its simple really. Due to miraculous new 3D virtual reality visors and holograms, women are no longer going to Macy’s for servile kiss ass salesman and to try things on and doing it in 3D Cyberspace. Its really simple. You’d have to be really simple to buy this argument, but if you do, have you tried Trump mail Order Steaks, and thought about buying swampland in Florida with NO MONEY DOWN? This may be a lucky day.

4 06 2017
Nicholas Stix

I’m just spitballing here, Blogmeister, but is it possible that the economic theory or notion you discussed (2) unwittingly had racial/ethnic presuppositions about economic actors that no longer hold?

5 06 2017
hondo

You just confused me further. I have n idea.

6 06 2017
UlricKerensky

You need the breakdown of the actual store locations.

Payless locations were waited heavily in older malls, with all that entails.

6 06 2017
countenance

That has a lot to do with it, but I remember once upon a time that most Payless locations were standalone.




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