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Middle Class Shopping Less at Lousy Stores, Eating Less at Lousy Restaurants

sears-jcpenney

The New York Times declares that “The Middle Class Is Steadily Eroding.” Their evidence is that demand for mid-range goods and services seems to be on the decline.

In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmann’s, whose Chelsea store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models.

As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.

[...]

In response to the upward shift in spending, PricewaterhouseCoopers clients like big stores and restaurants are chasing richer customers with a wider offering of high-end goods and services, or focusing on rock-bottom prices to attract the expanding ranks of penny-pinching consumers.

“As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be,” Mr. Maxwell said. “You don’t want to be stuck in the middle.”

As Dave Schuler has pointed out ad infinitum over the years, this particular discussion is hampered by the lack of useful definitions of “rich,” “poor,” and “middle class.” And, indeed, any sort of numbers at all are hard to come by. Still, the numbers we do have are striking:

Although data on consumption is less readily available than figures that show a comparable split in income gains, new research by the economists Steven Fazzari, of Washington University in St. Louis, and Barry Cynamon, of the Federal Reserve Bank of St. Louis, backs up what is already apparent in the marketplace.

In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995, the researchers found.

Even more striking, the current recovery has been driven almost entirely by the upper crust, according to Mr. Fazzari and Mr. Cynamon. Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.

But that wouldn’t seem to explain much of the phenomenon at hand. While it makes sense that an increasingly affluent top 5 percent would dine at ever-nicer restaurants and buy more luxurious automobiles and refrigerators with all the bells and whistles, they still only make up 5 percent of the consumer base.  Are the other 95 percent no longer able to afford to eat at Olive Garden? Are they instead upgrading to Ruth’s Chris but dining out less frequently?

For example, luxury gambling properties like Wynn and the Venetian in Las Vegas are booming, drawing in more high rollers than regional casinos in Atlantic City, upstate New York and Connecticut, which attract a less affluent clientele who are not betting as much, said Steven Kent, an analyst at Goldman Sachs.

Among hotels, revenue per room in the high-end category, which includes brands like the Four Seasons and St. Regis, grew 7.5 percent in 2013, compared with a 4.1 percent gain for midscale properties like Best Western, according to Smith Travel Research.

But that just tells us that those willing to pay absurd mark-ups for exclusivity and service are less price sensitive than budget conscious consumers.

At G.E. Appliances, for example, the fastest-growing brand is the Café line, which is aimed at the top quarter of the market, with refrigerators typically retailing for $1,700 to $3,000.

“This is a person who is willing to pay for features, like a double-oven range or a refrigerator with hot water,” said Brian McWaters, a general manager in G.E.’s Appliance division.

Clearly, I’m not super-rich. Not only was I completely oblivious to the availability of refrigerators that dispense hot water I can’t fathom why I would that feature.

At street level, the divide is even more stark.

Sears and J. C. Penney, retailers whose wares are aimed squarely at middle-class Americans, are both in dire straits. Last month, Sears said it would shutter its flagship store on State Street in downtown Chicago, and J. C. Penney announced the closings of 33 stores and 2,000 layoffs.

Loehmann’s, where generations of middle-class shoppers hunted for marked-down designer labels in the famed Back Room, is now being liquidated after three trips to bankruptcy court since 1999.

The Loehmann’s store in Chelsea, like all 39 Loehmann’s outlets nationwide, will go dark as soon as the last items sell. Barneys New York, which started in the same location in 1923 before moving to a more luxurious spot on Madison Avenue two decades ago, plans to reopen a store on the site in 2017.

Investors have taken notice of the shrinking middle. Shares of Sears and J. C. Penney have fallen more than 50 percent since the end of 2009, even as upper-end stores like Nordstrom and bargain-basement chains like Dollar Tree and Family Dollar Stores have more than doubled in value over the same period.

But Sears and Penney’s have been struggling for decades; they’re inevitably going to way of Montgomery Ward’s. The stores simply lack an identity and their clothing lines fall into the worst possible niche: they’re rather expensive but lack cachet. And I suspect Loehmann’s is a victim of economies of scale: it’s being out-competed by the likes of Marshall’s/TJ Maxx, Filene’s Basement, Nordstrom’s Rack, and the plethora of outlet malls that have sprung up all over creation the last twenty or twenty-five years.

A shift at Darden, which calls itself the world’s largest full-service restaurant owner, encapsulates the trend. Foot traffic at midtier, casual dining properties like Red Lobster and Olive Garden has dropped in every quarter but one since 2005, according to John Glass, a restaurant industry analyst at Morgan Stanley.

With diners paying an average tab of $16.50 a person at Olive Garden, Mr. Glass said, “The customers are middle class. They’re not rich. They’re not poor.” With income growth stagnant and prices for necessities like health care and education on the rise, he said, “They are cutting back.” On the other hand, at the Capital Grille, an upscale Darden chain where the average check per person is about $71, spending is up by an average of 5 percent annually over the last three years.

LongHorn Steakhouse, another Darden chain, has been reworked to target a slightly more affluent crowd than Olive Garden, with décor intended to evoke a cattleman’s ranch instead of an Old West theme.

The economy has definitely been down and it’s hit those in the middle hard. So it wouldn’t shock me at all if they were cutting back on luxuries like dining out. But I’m not sure that looking at one company tells us that. Red Lobster is a genuinely horrible restaurant. Once upon a time, it was considered one of the more upscale chains but, as people got exposed to better food, people realized how bloody awful Red Lobster is. And it’s still overpriced.  And, while I think Olive Garden is better than its very outspoken critics give it credit for, it’s certainly not hard to find better Italian-style far at that price point.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. john personna says:

    Many of us would have liked to see frugality and simpler lifestyles pervade the middle class sooner, as an antidote to debt driven consumption. If we aren’t as rich as we thought we were, then being happy with what we have, or with simple purchases, is a really good adaptive behavior.

    That said, I don’t think that adaptation disproves the trust of the study, that the consumer markets are further bifurcating, between those new frugals and the still carefree spenders.

    IOW, it is good to be happy without the hot-water-refrigerator, but it isn’t quite as flush as buying said fridge out of cash flow and without blinking.

    Like or Dislike: Thumb up 8 Thumb down 1

  2. john personna says:

    In related news, a study of “Middle Class Americans” – “42% Say Paying the Bills AND Saving for Retirement ‘Not Possible’”

    Like or Dislike: Thumb up 10 Thumb down 0

  3. OzarkHillbilly says:

    Even more striking, the current recovery has been driven almost entirely by the upper crust,

    So the rich really are driving the economy.

    ALL HAIL THE ONE PERCENTERS! Get on your knees….

    Like or Dislike: Thumb up 12 Thumb down 0

  4. KM says:

    Middle Class Shopping Less at Lousy Stores, Eating Less at Lousy Restaurants

    For a class some years ago, we had to read Bowling Alone by Robert Putnam. Much of the class went on and on about how insightful it was and pointed out such “gems” as because the bowling industry was dying, we must be suffering some kind of middle-class extinction (as compared to the glory days of the 50’s). Even though he admitted individual bowling attendance was up, since collective league membership was down, it must be a utterly negative thing with deeply social roots and implications. I called BS on this analysis and suffered as a pariah for the rest of the term.

    More Americans are bowling than ever before, but they are not bowling in leagues. Putnam shows how changes in work, family structure, age, suburban life, television, computers, women’s roles and other factors have contributed to this decline.

    Alarmist BS, just like the NYT piece. Tastes and attitudes change, businesses rise and fall. Quality suffers and challengers take advantage of that (as they should!). Trends move like leaves on the wind. Or maybe society just decided it didn’t want whatever you’re selling anymore.

    There are plenty of signs the middle class is screwed- this ain’t one of them.

    Like or Dislike: Thumb up 3 Thumb down 0

  5. michael reynolds says:

    I think this is a bunch of different phenomena rather than one single thing.

    1) Chains like Sears in retail and Red Lobster in restaurants are just concepts past their prime. They’re worn out. Sears stores are cavernous, badly-lit and horribly staffed. Red Lobster’s “all you can eat” approach is a joke from early Simpson’s episodes. It just isn’t relevant anymore. Who wants 100 shrimp swimming in faux butter?

    2) Kids drive shopping choices. My daughter would have me up on war crimes charges if I made her shop at Penny’s or Sears. Interestingly, it’s not a brand-conscious thing in terms of, “I need the latest, coolest,” rather it’s about the style and quality. It’s aesthetic. Sears is depressing, their displays are depressing, their disheartened staff are depressing, their offerings are depressing.

    3) Amazon is the new Sears. They’re better at it. Why try to cram a whole bunch of items into a giant mall box when you can cram every single item on earth onto the bright screen on your lap? Why drive when I can click?

    4) Kids and millennials are less materialistic. They just don’t give much of a damn about cars and clothes and big houses. That whole thing reeks of the 80’s and 90’s. I’ve made this argument a couple of times before to the usual poo-pooing, but now we’re starting to see mainstream publications remarking on the phenomenon of millennials and their indifference to cars, and the (to me) amazing indifference of teens to even getting licenses. Their lives are online. That’s where they live now. Status is a bunch of Twitter followers, cash value: zero dollars.

    Like or Dislike: Thumb up 10 Thumb down 0

  6. john personna says:

    @KM:

    I think you and James might be focusing on the “cases in point” when in fact those aren’t the basis for their argument. They have broad data, and broad reports.

    The top 5 percent of earners accounted for almost 40 percent of personal consumption expenditures in 2012, up from 27 percent in 1992. Largely driven by this increase, consumption among the top 20 percent grew to more than 60 percent over the same period.

    and

    More broadly, about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income, according to the study, which was sponsored by the Institute for New Economic Thinking, a research group in New York.

    Like or Dislike: Thumb up 9 Thumb down 0

  7. Neil Hudelson says:

    @KM:

    It’s been awhile since I read the book–but wasn’t that the point of the book (and indeed, even in the title): that activities that create cohesive communities and neighborhoods are going away, while more people are “bowling alone?” it strikes me that if your class was teaching that book as an economic predictor, rather than a treatise on the changing culture and communities in America, then your class was poorly ran.

    The data you cite–while accurate–only confirms what in my mind was the central thesis of the book: that people are now bowling alone. (Again, it’s been a long time since I’ve read it).

    *************

    James,

    The stores simply lack an identity and their clothing lines fall into the worst possible niche: they’re rather expensive but lack cachet. And I suspect Loehmann’s is a victim of economies of scale: it’s being out-competed by the likes of Marshall’s/TJ Maxx, Filene’s Basement, Nordstrom’s Rack, and the plethora of outlet malls that have sprung up all over creation the last twenty or twenty-five years.

    I think this hits on something that isn’t covered in studies about trends. Could it be that the generation now entering the middle class–the millenials–simply have different spending habits than previous generations, and that due to the psychological effects of starting careers and lives during the Great Recession, we have become somewhat smarter consumers?

    My wife and I are by no means wealthy. Many of the appliances we buy are higher end. Not because we want a hot water dispenser on our refrigerator (WTF?) but because before we buy, we use crowd sourcing to balance appliance longevity with price–often meaning we upgrade slightly, as it costs less in the long run. Similarly, we go out to eat seldom, but when we do we go to a nicer restaurant rather than have an iceberg salad at Olive Garden. I can only speak for my friends and coworkers, but most of my (white, middle class, career oriented)** friends do the same.

    JC Penny, Olive Garden, and the like are dying because they don’t offer anything a lot of new consumers want to buy. It’s not just that the middle class has shrunk, it’s that the priorities of the middle class are simply changing.

    **I acknowledge that the plural of anecdote is not data.

    Like or Dislike: Thumb up 6 Thumb down 0

  8. Neil Hudelson says:

    @michael reynolds:

    3) Amazon is the new Sears. They’re better at it. Why try to cram a whole bunch of items into a giant mall box when you can cram every single item on earth onto the bright screen on your lap? Why drive when I can click?

    4) Kids and millennials are less materialistic. They just don’t give much of a damn about cars and clothes and big houses. That whole thing reeks of the 80′s and 90′s. I’ve made this argument a couple of times before to the usual poo-pooing, but now we’re starting to see mainstream publications remarking on the phenomenon of millennials and their indifference to cars, and the (to me) amazing indifference of teens to even getting licenses. Their lives are online. That’s where they live now. Status is a bunch of Twitter followers, cash value: zero dollars.

    This. Only stated much better than my attempt.

    Like or Dislike: Thumb up 2 Thumb down 0

  9. Ben says:

    Are the other 95 percent no longer able to afford to eat at Olive Garden? Are they instead upgrading to Ruth’s Chris but dining out less frequently?

    Speaking for my own family, this is exactly what’s going on here. We’ve come to realize that the major chain restaurants (like Applebees, Fridays, Olive Garden, etc) just SUCK and are a waste of money. We can make better food at home for much cheaper. We would much rather go out half as often to a place that costs twice as much, so we can get really good food and a good bottle of wine. And it isn’t just restaurants, it’s consumer goods too. We need a new dishwasher. But rather than go buy the entry-level piece of junk, we’re suffering through an extra year of having to pre-wash dishes and having spotty glasses so that we can buy a really nice dishwasher hopefully next year.

    Like or Dislike: Thumb up 3 Thumb down 0

  10. john personna says:

    On whether the decline of chain restaurants might be more than the lack of rebound in middle class consumer spending – I was never a chain restaurant eater but I think that my friend yelp might have had an impact. A chain is a low-information choice. There is now more information freely available.

    Yelp recorded 100 million monthly unique visitors in January [2013]

    Like or Dislike: Thumb up 7 Thumb down 0

  11. James Joyner says:

    @michael reynolds: I do think there’s a lot of that going on. Although I wonder how much of it’s an urban-suburban thing. Cars are still pretty much a necessity in most of the country, simply owing to the lack of viable alternatives.

    @john personna: I cite both those paragraphs in the OP. I don’t discount them. I”m just saying that I’m not sure their headline analysis—that the decline of some middle brow establishments is a sign of a shrinking middle class.

    Like or Dislike: Thumb up 1 Thumb down 0

  12. PD Shaw says:

    What’s good for General Motors Red Lobster is good for the country.

    Like or Dislike: Thumb up 4 Thumb down 0

  13. john personna says:

    @James Joyner:

    I did a search before I hit “post” which showed I was the only one saying “90 percent.”

    More broadly, about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income

    That is very significant.

    Sure, after that we can talk about how we hate chain food, and all love a bowl of pho.

    Like or Dislike: Thumb up 4 Thumb down 0

  14. john personna says:

    Though my goodness, if 90% of the growth in consumer spending, POST-CRASH, is in the [top] 20%, why on earth would the mid-range chains be doing well?

    Like or Dislike: Thumb up 8 Thumb down 0

  15. Gustopher says:

    Isn’t there inflation adjusted income data somewhere which we can look at to get an answer directly, rather than needing to examine individual stores and peer at the goat entrails being served at Applebee’s?

    Like or Dislike: Thumb up 2 Thumb down 0

  16. Scott says:

    This is just the flip side of the inequality argument. If you want people to shop at your stores, they will have to have money to spend. Walmart is not doing that great (maybe because it is reaching saturation, maybe not). Is it because the people who shop at Walmart are the same socioeconomic group who works there. And they are under increasing economic stress. Henry Ford had the insight that if he wanted people to buy his car,then they had to have money to do it. And he paid his employee more.

    I suspect if the minimum wage was increased, Walmart would have an increase in sales. And it would be above and beyond what it would cost in increased labor costs. If so, then the rational thing to do is for Walmart to support an increased minimum wage.

    Like or Dislike: Thumb up 10 Thumb down 0

  17. michael reynolds says:

    @James Joyner:

    I’m at a loss to understand the car thing. My son is 16, eligible for a license, and he gets a brand new car if he wants one. (I’m think Ford Fusion.) He’s put in about half the behind-the-wheel time required and he’s quite good at it, but hasn’t done anything in probably three months to finalize the deal. I was sort of pushing him until it dawned on my wife and I: why are we in a hurry to get the spoiled little bastard a car?

    Like or Dislike: Thumb up 14 Thumb down 0

  18. john personna says:

    @Gustopher:

    Given. If just 10% of the inflation adjusted growth in consumer spending came from the bottom 80% of consumers, it’s hard for Applebee’s or any other middle-line store to make a value proposition.

    Especially given the “since 2009″ baseline. 2009 was the bottom of the Great Recession.

    Like or Dislike: Thumb up 2 Thumb down 0

  19. PD Shaw says:

    The problems with the restaurants in that article are overstated. Here is a summary from December:

    On Thursday, Darden said its profit for its fiscal second quarter ended Nov. 24 fell 42% to $19.8 million, or 15 cents a share. Revenue rose 4.6% to $2.05 billion but missed Wall Street expectations.

    During the period, Olive Garden sales rose 2.4% to $869 million, largely due to added revenue from 25 new restaurants. But same-store sales declined 0.6%.

    LongHorn Steakhouse added 46 new restaurants and managed a same-store sales boost of 5%.

    At Red Lobster, however, overall sales for the quarter were down 4.9% to $561 million with a 4.5% decline in same-store sales.

    These are mature brand which cannot reasonably expect the types of sales increases that Wall Street likes. Investors probably prefer the new fast casual restaurants like Five Guys, Qdoba, or Noodles and Company that are going to show double digit increases for at time.

    Like or Dislike: Thumb up 4 Thumb down 0

  20. Rob in CT says:

    @john personna:

    I came here to post this and see that James got it into the article and you highlighted it in the comments. Bah! Feh! Meh.

    Our dining out certainly has changed since 2007, but it has nothing to do with our finances. We moved. We used to live in a small city with lots of decent to good eat-out choices close to our house. We moved out to the boonies and now everything is at least a 20 minute drive. Less selection, more effort required. And then we had kids. We hardly ever eat out. When we do, we go to the local (well, like I said, 20 minutes away) brewpub. Stay thirsty, my friends.

    Like or Dislike: Thumb up 0 Thumb down 0

  21. Scott says:

    @michael reynolds: Actually, here in San Antonio, a car is still important to the kids, as is a driver’s license, My son, 16, just got his license and drives himself around. He would, of course, like a new car but is content with the 98 Civic handed down from his brother and sister. On the other hand, cousins in San Francisco have graduated HS and still don’t have their license. They are content to get around on public transportation. It’s part situational and part cultural.

    Like or Dislike: Thumb up 2 Thumb down 0

  22. Scott says:

    As for eating out, we tend to go to locally owned establishments. I think it is part taste and part affectation. We are solidly middle/upper middle class and like the idea of support local establishments versus chains. We also tend to go to farmer’s market and buy local there also. It may all cost a bit more but that is part of the psychic value we receive in return.

    To say nothing of avoiding places with huge portions which I definitely don’t need.

    Like or Dislike: Thumb up 2 Thumb down 1

  23. C. Clavin says:

    Sears and Red Lobster are symptoms of the disease.
    Median income is $52,000…ignoring the Bush Contraction and adjusting for inflation that is still a 16 year low.
    So much for the Republican war on the middle class rising tides and lifting all boats.
    A couple items in the news to note:
    – The deficit is hitting another new low this year…barely short of half of the $1T deficit Republicans and Bush left in their wake…remember Dick “deficits don’t matter” Cheney? So when is all this deficit reduction Republicans have been preaching since the second McCain lost to Obama going to create the massive economic boom they keep promising?
    – A new report from the New York Fed shows that the reduction in work force participation IS IN FACT driven by boomers retiring. So the employment situation is not as bad as naysayers like Doug have been whining about incessantly.
    It seems to me if we could stop listening to Republican economic catechisms that have been proven to be absolutely and completely wrong…maybe Sears and Red Lobster would be OK.

    Like or Dislike: Thumb up 6 Thumb down 5

  24. gVOR08 says:

    Thank you. A Capital Grill just opened near us. Thought about giving them a try. I hadn’t realized they’re Darden. We don’t do Darden. They’re pretty notorious for screwing over their staff. If we take our business elsewhere, particularly local non-chain places, there’s at least a chance they’re not as big a set of a******s.

    Like or Dislike: Thumb up 3 Thumb down 0

  25. KM says:

    @Neil Hudelson:

    then your class was poorly ran.

    Indeed it was. I think the ultimate point was something along the lines of how “modern” social trends were translating to middle-class economic ruin via the destruction of the group activity but honestly, it was such a crappy course he could have been trying to make a point about anything. All I got out of it was confusion as to “why if sales/attendance is up, why do you care if they are in groups or not”, distrust of potential social commentary trying to pass itself off as economics and a supreme dislike of that book. It’s colored my opinions with regards to studies like this since.

    Like or Dislike: Thumb up 1 Thumb down 0

  26. john personna says:

    @PD Shaw:

    Not terrible, and declining same-store sales, would be bad enough in a growing segment. It would say that they aren’t playing the best game. Whatever it is the chains do to bring in chain customers (deals, menu innovations, more tv) they aren’t doing enough of it.

    But,

    Study: Consumers to dine out less often in 2014

    The health of restaurant food is increasingly viewed with suspicion, but:

    Concern about finances is expected to hinder dining out among 59 percent of respondents in the recent survey, compared with 54 percent during the first quarter and 51 percent last year.

    That is pretty much going the wrong way.

    Like or Dislike: Thumb up 1 Thumb down 0

  27. john personna says:

    @KM:

    It sounds like it has had greater impact than that, coloring your view of studies completely unlike that one.

    Like or Dislike: Thumb up 0 Thumb down 0

  28. KM says:

    @michael reynolds:

    I was sort of pushing him until it dawned on my wife and I: why are we in a hurry to get the spoiled little bastard a car?

    Ah, consumer indoctrination. Since owning a car is traditionally a sign of middle-class or higher status, we work it into our standard coming-of-age rituals to the point where when someone doesn’t want a car, you first instinct is to push them towards it and spend that green. Advertising, it works b*tches. A teenager who doesn’t drive used to be a stigma to avoid – now it’s on its way to being a new norm.

    On the other hand, kudos for being a good parent willing to take that cost on. I would have loved to have someone take that bill from me when I first struck out.

    Like or Dislike: Thumb up 2 Thumb down 0

  29. sam says:

    @KM:

    “I think the ultimate point was something along the lines of how “modern” social trends were translating to middle-class economic ruin via the destruction of the group activity”

    If that was his or her point, he or she had the causality going in the wrong direction. The point of that book, as I recall, was that the decline in blue collar manufacturing jobs in the US led to a decline of leagues of bowling teams associated with manufacturing companies. My wife’s parents were blue-collar workers in Nashua, NH. My mother-in-law told me that nearly every company in town had a bowling team, and there were leagues all over the place. As manufacturing declined, so did the leagues.

    As far as Olive Garden goes, maybe folks are tired of the bullshit. I mean, UNLIMITED BREADSTICKS!!! — The wife and I were in an OG, and I asked to waiter about that. He told me that the waitstaff is instructed to bring the-number-of-people-seated-at-the-table plus one breadsticks, and to never, ever mention breadsticks again.

    Like or Dislike: Thumb up 2 Thumb down 0

  30. PD Shaw says:

    @sam:” the waitstaff is instructed to bring the-number-of-people-seated-at-the-table plus one breadsticks, and to never, ever mention breadsticks again.”

    AT LAST!!! This has been my theory about breadstick placement for a long-time, not just the Olive Garden (to which I’ve probably been to once in the last ten years).

    Like or Dislike: Thumb up 1 Thumb down 0

  31. michael reynolds says:

    @KM:

    Unfortunately, this teen is driven. Driven there, driven back, up and down Tiburon Boulevard and the 101. It’s quite a beautiful drive, but 4 or 6 or 8 times a day and it gets old. The thought process had nothing to do with advertising, I’m just sick of sitting in a high school parking lot waiting for him to come out of some after-school event or meeting. There are nights he doesn’t get out until 10:30. That means I can’t have a drink before that. Yeah: it’s that awful.

    Then, came the writer’s disease – imaging that everything is foreshadowing. By pushing him we’d be driving him (heh) to a fatal accident.

    Less consumer, more neurotic. The crazy balanced out the selfish and resulted in paralysis. Kind of par for my household.

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  32. Raoul says:

    True story: over the holidays I went to Sears and saw a Kindle Fire cover on sale. When I went to the cashier he said the item had been marked down to zero and he could not sell it. I ask for the manager and he pretty much said the same thing. Here I am willing to pay $15-20 for a piece of plastic and they would not take the money nor figure out the price. I think the current business model of Sears where you have departments and intra-departments fighting each other for productivity gains is killing the company. I believe this particular item had ceased been part of their inventory and another department would take the hit thus they did not lose anything and maybe the other department would suffer. The current CEO of Sears, who instituted the intra department competition, needs to leave the company for it to have any chance. I ended up paying $35 for a cover in another store.

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  33. al-Ameda says:

    Are the other 95 percent no longer able to afford to eat at Olive Garden? Are they instead upgrading to Ruth’s Chris but dining out less frequently?

    My observation on the food stuff:

    (1) I’m not sure you’re saying the Olive Garden or Red Lobster are lousy restaurants? Olive Garden caters to a regular middle class “non-foodie” customer base, yet as a “foodie” I can go to a simple café somewhere in San Francisco, the East Bay, or up where I live, and get a very good meal for less than I would spend at the Olive Garden. Olive Garden appeals to many in my extended family because the portions are very big, and they associate that with value. At my “foodie” café I get a reasonable portion of much more tasty food at about the same price as Olive Garden (some would say that the smaller portion equals more expensive, but there is a cost to overeating too.)

    (2) Upgrade to Ruth’s Chris Steakhouse? That is very expensive, I don’t go there unless a relative is in from the East or Midwest, because that’s the kind of ‘special’ meal they want when they’re visiting the Bay Area. You get a big slab of steak, huge portions – they love it. It’s far too much food for me. I’d prefer to go to one-of-a-kind café to get the same type (steak) of meal, and spend less, and not be held hostage to 24 to 32 ounces of steak and a brick sized baked potato.

    To me, big portions do not equal value.

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  34. C. Clavin says:

    @Raoul:
    In 8 years Sears has lost 25% of it’s sales and it’s stock price has dropped over 60%.
    Why?
    http://www.businessweek.com/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles

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  35. grumpy realist says:

    A lot of the chain stores have simply turned into crappy sellers of even crappier products, and they have nothing that you want.

    I had to order an egg beater on line. Ditto for a rotary cheese grater. Had gone to three cavernous departments stores and NONE of them had either!

    There’s a reason why we’ve all become Amazon-prone. Also it saves so much time rather than driving around from store to store looking for X. I get most of my clothes off Ebay at present.

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  36. wr says:

    @michael reynolds: If you’re really desperate to buy someone a car, my Jag is getting kind of old. If we have to go American, I really liked the hybrid Ford C-max I rented in Portland.

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  37. wr says:

    If Loehmann’s was being out-competed by Filene’s Basement, that’s pretty sad, since Filene’s went out of business several years ago…

    You’re probably right about TJ Maxx, though. My wife used to do business with them, and they really knew what they were doing.

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  38. michael reynolds says:

    @wr:

    If you’re really desperate to buy someone a car, my Jag is getting kind of old. If we have to go American, I really liked the hybrid Ford C-max I rented in Portland.

    I can see why you would think so, given my avatar there, but I’m not Elvis.

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  39. grumpy realist says:

    @wr: Aren’t Jags the ones that drop their transmissions out on the road?

    (Heard that was a problem at one point in history.)

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  40. OzarkHillbilly says:

    @michael reynolds: Not sure of the distances traveled, but have you tried letting him walk?

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  41. Rafer Janders says:

    @OzarkHillbilly:

    It’s Southern California, so not only are many places a 10, 20, 30 mile roundtrip away, but even if it is within walking distance, you often can’t actually walk there as there are no sidewalks or safe footpaths.

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  42. Matt says:

    @michael reynolds: Oh man you’re on a roll driving me to laughter.

    When I was located in Chicago I rarely used my car preferring the L train and such.

    Now that I’m located in Texas a car is a must have. It’s much like living in the rest of Illinois too.

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  43. john personna says:

    The premium steakhouses are interesting. They are definitely fun, but on the other hand they don’t really have a huge “preparation gap” over a backyard grill. I can grill a steak as well as Ruth Christ. On the other hand, I won’d pretend I could Thai as well as any neighborhood joint.

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  44. grumpy realist says:

    @Matt: I actually got rid of my car because I used it so little. And some of the suburbs of Chicago are trying to fix the holes in their budget by hiking the garage parking permit rates 5$-20$ every three months. Which doesn’t sound like much until you realize you’re now paying $80 more every three months than you did last year. It adds up…..

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  45. B. Minich says:

    Where did you get that picture? That’s my hometown mall in Indiana, PA. We called that the “new” mall, though it had been there 20-30 years when we did so. But when Montgomery Wards and Hills, the anchor tenants for the Regency Mall, went out, the Regency Mall ended up not really being a mall in name only, so the “new” got dropped after that point.

    Both malls are really small, btw. Indiana, PA is a small town.

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  46. David in KC says:

    @michael reynolds: I’m sure you would look good in a white jump suit…

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  47. Pete S says:

    For the restaurants, I would say that part of the “problem” is definitely a move to cook at home. My wife and I have not dropped out of the middle class in recent years, but we do eat out less. A large reason for this is that it is much easier to find the ingredients for more varied cuisine in our local grocery stores than in the past. And as a special bonus we can then have a couple of glasses of wine with our meal without having to decide who is going to drive home….

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  48. OzarkHillbilly says:

    @Rafer Janders: Actually, it’s northern CA, tho for all I know the distances are the same. I was mostly curious about the driving him to school. I suppose if his son is going to a private school the distance could easily be prohibitive but most public schools are within walking distance (less than 2 miles) in my experience, which, again, is limited to the midwest.

    And then again, the world is different now. Seems like all the kids ride buses nowadays.

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  49. PD Shaw says:

    @Pete S: My area seems to have an explosion of construction in new grocery stores that appear to have more focus on products and layout convenient for bobos to pick up food to finish preparing at home.

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  50. Tyrell says:

    I used to go to Red Lobster, but that was when they had more choices and less frozen stuff. I go the the local fish camps where I can get a lot of fresh shrimp, bass, flounder, fries, and hush puppies for less than $10 a plate. I also go to some local barbecue places.
    I have been finding some good deals on books, clothes, and snacks at some of the local dollar stores. Some of the books are in the top ten NYT list and are hard backs. I found two new college sweatshirt jackets at the local thrift shop: $5 each and a nice weather radio for $6.
    I am looking for a good price on jerseys (NHL) if anyone knows a site.

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  51. OzarkHillbilly says:

    @Tyrell:

    I go the the local fish camps where I can get a lot of fresh shrimp, bass, flounder,

    Sigh…. A hillbilly can dream, can’t he?

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  52. wr says:

    @grumpy realist: Long time ago. Mine comes from the Ford era — no problems, except I had to replace the transmission around 60,000.

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  53. wr says:

    @wr: Come to think of it, if the old transmission had fallen out on its own, I probably could have saved a few bucks on labor…

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  54. grewgills says:

    @michael reynolds:

    Amazon is the new Sears.

    Because Amazon is what Sears used to be, a catalog driven business. That the catalog is on your computer just makes it a bit more convenient.

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  55. john personna says:

    @Tyrell:

    I go the the local fish camps where I can get a lot of fresh shrimp, bass, flounder, fries, and hush puppies for less than $10 a plate.

    That sounds fantastic. I did drive by Applebee’s to get a bowl of pho today, but I’d have to drive a lot further to find a fish camp!

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  56. grewgills says:

    @john personna:
    I think you hit on something there. Chain restaurants were the safe place to go if you were somewhere new. You could go to a local restaurant and gamble on what you got or you could go to Olive Garden and know what you were getting. With so much info available on our phones and tablets now anyone can find a good local spot wherever they go and that spot will likely be cheaper, better, or both.

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  57. PD Shaw says:

    I think John Personna is right that these types of chains can be a low-information choice. I’ve noticed a lot of them locate near areas with lots of hotels. I’ve offered people visiting here on business some local dining suggestions, but have frequently been snubbed by the desire to eat at the restaurant chain on the floor of the Hilton in which they are staying. These can have predictable, known qualities.

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  58. dazedandconfused says:

    An economy is people spending money, not saving money.

    The thing that allows all these small businesses to thrive is a lot of people with a little extra spending money. “They don’t like big houses and cars”? BS. So the guys who don’t buy them get the hot chicks now?? They can’t afford them anymore. It’s that simple.

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  59. Rafer Janders says:

    @OzarkHillbilly:

    Actually, it’s northern CA, tho for all I know the distances are the same.

    Ah, got that wrong.

    I was mostly curious about the driving him to school. I suppose if his son is going to a private school the distance could easily be prohibitive but most public schools are within walking distance (less than 2 miles) in my experience, which, again, is limited to the midwest.

    Yeah, I don’t think that’s necessarily true in California. And again, even if something is less than 2 miles away as the crow flies, there’s often no safe or direct way to walk there (no crossings or sidewalks, meandering roads, hills or gullies in the way, etc.). The roads are built for cars, not people.

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  60. michael reynolds says:

    People go to chains because although they’re never really good, they’re also never really bad. On a scale of 1-10 they exist in the 4-7 range. They probably won’t poison you (except slowly) but neither will they amaze you.

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  61. Gromitt Gunn says:

    @grumpy realist: I had a similar experience last year trying to buy a funnel.

    Seriously. A funnel.

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  62. C. Clavin says:

    @michael reynolds:
    Same reason I drink Budweiser.
    Always the same…no surprises.
    Good ol American macro-brew.
    Well… Belgian.

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  63. grewgills says:

    @C. Clavin:
    and I thought you were high brow, my image of you is shot

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  64. C. Clavin says:

    @grewgills:
    One of the most highbrow oafs you will ever meet.

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  65. bill says:

    @michael reynolds: true, reminds me of the best superbowl ad- radio shack making fun of their own, dated stores and at least trying to revamp them. not like i’ll go into one for whatever reason, but a good ad nonetheless.

    odd that the nyt article didn’t really provide much in the way of stats to conclude that the middle class is dying- just rambling commentary.

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  66. Just 'nutha' ig'rant cracker says:

    @al-Ameda: I almost never ordered a steak at a restaurant until I moved to Korea–where an 8 ounce piece of sirloin (provided you can find one) will run 25 or 30 dollars at a supermarket. There was no reason to go to a restaurant to buy something that I could make at home just a well.

    Here, I eat a steak out maybe once or twice a year when I get nostalgic for American food. It’s also the only time that I go to chain restaurants–too many good privately owned restaurants in Korea to bother with chains.

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  67. Just 'nutha' ig'rant cracker says:

    @James Joyner: I think you have the relationship reversed here–although the authors may, too. We already have statistical data that shows quite clearly that the middle class is either shrinking or separating into two classes–one much higher, the other much lower. The fortunes of Olive Garden and Red Lobster don’t prove the middle class is shrinking, they are an effect of the previously observed phenomenon.

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  68. Tyrell says:

    Is this related to opinions that the end of the American shopping mall is at hand? Just as one of the largest malls, Xanada in New Jersey is nearing completion. Newsweek reported on the mall decline a few months ago. What are good uses for malls beyond shopping? How about an indoor community, with condominiums, schools, colleges, medical facilities, entertainment, recreation, and indoor parks? See deadmall.com for galleries of dead malls. We are seeing a lot of the anchor stores in these malls closing or in financial trouble. It brings up the question: recycle these buildings or tear them down and build new? Location is also important. If the location goes into a transition, a decline, then crime and other undesirable problems start and the mall is affected.

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  69. grumpy realist says:

    @PD Shaw: You are reminding me of a boyfriend who insisted (in places like ROME, no less!) on going to the local Hard Rock Cafe. I never could figure out whether he wanted to compare the different Hard Rock Cafes, or simply wanted a slightly higher version of McDonalds (i.e., knew what he would get.)

    I’m the exact opposite. Love trying the local mom-and-pop restaurants.

    If you do a lot of road trips, you may find yourself eating at a lot of places like Applebee’s and Perkins and TGIF because you can see the signs from the highway. I certainly did, when I got sick of eating gas station hotdogs.

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  70. OzarkHillbilly says:

    @grumpy realist: Yo tambien, amiga. Food is a cheap adventure. Try something new. Might be wonderful. Might be horrible. What is the worst thing that can happen? That you have to order something else? Heaven forfend!!!

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  71. john personna says:

    @Just ‘nutha’ ig’rant cracker:

    I should go get Korean today. Genius food, and the pop-cultural belief right now is that fermented foods of all kinds are really good for us. I’m not sure I believe that part, but the small dishes of sides taste great.

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  72. grumpy realist says:

    @john personna: Make your own kimchee. Only takes a few days, you know exactly what goes into it, and it’s roughly 1/2 the cost (or less) of buying a jar. (Madhur Jaffrey in her Vegetarian Cooking has a good basic recipe. Most of the heat comes from the fresh ginger.)

    Mmmm. Kimchee…..

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  73. john personna says:

    @grumpy realist:

    I like it, but I guess my diet is too varied to have a bunch of it as a “staple.” At least not until I devise a kimchee burrito? A kimchee breakfast burrito? I might be hungry enough to make that work!

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  74. john personna says:

    BTW, I was mentioning my cheap pho outing to a Vietnamese friend. She said “Vietnamese eat cheap food, buy gold.”

    Perhaps not a bad strategy for all of us.

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  75. Grewgills says:

    @grumpy realist:
    Once you have smelled the house of someone making kimchee you might change your mind. The only worse cooking smell I’ve experienced is chitlins, that smelled like a sewage pipe backing up.

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  76. Barry says:

    @Scott:A Walmart higher-up recently commented that the were seeing more and more of their sales cluster around paydays.

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  77. Neil Hudelson says:

    @Grewgills:

    I believe Koreans traditionally bury ceramic pots full of kimchee-to-be (I’m sure they have a better word for it). I thought it was for temperature control, but every time I make kimchee I wonder if the tactic is purely for odor control.

    That said…make enough kimchee, and you start to love the smell. I imagine its the same way my pothead friends love the smell of skunk.

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  78. john personna says:

    @Neil Hudelson:

    I think burying is kind of an urban legend, and that they just leave them out.

    Kimchi Chronicles is kind of a fun show, if you can stream it.

    (Speaking of smells, and risking TMI, it’s just as well that I was alone in the house last night, post-kimchee.)

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  79. bill says:

    @john personna: i remember the “burying” thing from an episode of mash.
    back to dining matters-read a report that says Americans spend more dining out than on healthcare.

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  80. Blue Galangal says:

    @PD Shaw: I was recently in Orlando on business and when we broke off the Hilton/Disney compound to hit up an outlet mall my colleagues wanted to go to, the taxi driver could only suggest those mid-range chain restaurants.

    Foursquare and Urbanspoon to the rescue: we found a Venezuelan restaurant – within walking distance of that outlet mall, and all those chain restaurants – that was a mom-and-pop hole in the wall. Best food (and service!) of the entire 5 days.

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  81. Franktalker says:

    @dazedandconfused:

    An economy is spending money after paying essentials and saving 10% of one’s income (the historical norm). Right now it’s around 4% (it was even negative in the 2000s… hence the bust).

    The low interest rate environment is just pushing up asset prices (why those at the top have so much to spend) while the middle class is crippled by increasing housing, energy and food prices (oh yeah… those are “too volatile” to be included in the inflation rate).

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