A Slight Delay

Emails have circulated over the past couple of years warning that certain retailers were going out of business, resulting in gift cards purchased at these stores having roughly the same worth as a pile of stale pizza crusts. Retailers, of course, have then tripped over one another and themselves denying everything. In many cases, the retailers were perfectly healthy, or at least weren’t in trouble that bad. In today’s economy, however, all bets are off. There’s any number of ways you can spin this, but it isn’t good news any which way you look at it.

First, and most obviously, there’s unemployment. Let’s say that a 2,000-square-foot store employs ten people, some of them full time, and a handful part-time. If you close 384 of those, as Bombay Company did, that’s 3,840 people out of work… and Bombay Company is but one example; nearly every day, the market hemorrhages stores, most of them mom-and-pop outfits that won’t make the news; that fact would be cold comfort to those who’ve lost their jobs.

Then there’s the problem of filling those empty spaces. As an analysis by the Gerson-Lehman Group notes, it didn’t used to be much of a challenge filling a small- or medium-sized (up to ten thousand square foot) space, but even that’s become difficult in the current economic climate. When you factor in a bone-dry credit market, and consumers who aren’t buying, even fools aren’t lately rushing in where angels, or Starbucks, fear to tread. At the higher end–big box stores, which either anchor a mall/plaza, or that stand alone–the problem grows exponentially bigger. It means more job losses, lost tax dollars, lost revenue, and a piece of real estate that’s likely to stay empty for much longer than usual. If a Barnes and Noble closes, it’s not as though they have much competition waiting for that space; other businesses will likely have competitors in close proximity. Contraction among most big-box stores (with a few notable exceptions) means that vacancies are likely to stay that way. (more…)

A recent article on MSN.com tells of the rise of self-service checkouts and kiosks. If you listen to the marketing people–and somebody’s got to be listening to them, given that everything from gas stations to doctors’ offices now offers self-service–this improves service, speeds transactions, builds brand loyalty, and saves money.

Oh, really? In no particular order, let’s take this point-by-point. (more…)