Black Friday and Cyber Monday are now in the rear of our view and according to published statistics the numbers fell below what was predicted. Although approximately half of the American buying population joined long lines and browsed crowded stores, they spent $1.7 billion less than they did in 2012. But the pain is felt even more on Main Street where the competition is not the store next door, but the mall just up the highway.
They operate in the same economy of slow wage growth, high unemployment and sliding economic confidence. Many of their customers are their neighbors. They sit in the same pews and their children attend the same schools, but economic decisions often negate emotional bonds. Most local store owners could not compete with the huge discounts that the big stores offered. The dynamics of their size and cost structure makes them animals from different species and therefore incomparable. An organization like Wal-Mart, for example, can dictate the cost of procuring many of the items they carry in their inventory, one among the many drivers they have perfected in their business model.
When Wal-Mart opened their newest store, in Washington DC, it was with the blessing of the mayor, and by all account, the buying public. Despite the opposition from his city council, the mayor showed his support by vetoing a bill that would have raised the minimum wage that Wal-Mart could pay its DC staff, and then attending the opening ceremony like any good host. Shoppers ignored demonstration picket line and voted with their dollars in support of their newest convenience.
But can we really read anything into any of this? Have shoppers ruled on the side of low non-unionized wages in exchange for low cost items and the peril of their local stores? Or is it just the average Joe and Jane trying to stretch a buck?