Saturday, December 11, 2010

A Service Economy Risk


Click to enlarge.

Anchor Store

Early on, grocery stores were a common type of anchor store, since they are visited often. However, research on consumer behavior revealed that most trips to the grocery store did not result in visits to surrounding shops. As of 2005, the declining popularity of old-line department stores makes it necessary for mall management companies to consider re-anchoring with other retail alternatives, or mix commercial development with residential development to guarantee a captive clientèle. The challenges faced by the traditional large department stores have led to a resurgence in the use of supermarkets as anchors.

Good luck on that one.

See Also:
The Future of Retail Salesperson Employment
Cyber Deflation
Retail Trade Bubble

Source Data:
Yahoo Finance

4 comments:

  1. I just want to point out a subtle implication of this.

    If you downgrade from Darden to McDonalds then the restaurant industry needs about 25% fewer employees if you spend the same exact amount of money.

    You won't spend the same amount though. You're at McDonalds. You'll spend a lot less. That means the restaurant industry will require even fewer workers.

    That's a double whammy of job destruction.

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  2. Stag,

    That's a double whammy of job destruction.

    It certainly is. However, that dynamic should acutally aid our service eCONomy.

    To understand the inherent CONtradiction, one has to keep in mind we're not just a service economy, we're a debt service eCONomy.

    Replacing paying jobs and wages with debt is the key to "wealth creation".

    My word verification is "equitiv".

    ReplyDelete
  3. mab,

    That's great news!

    Perhaps we can get our debt serviced like we get our cars serviced. We could swap out the bad oil/debt and replace it with good oil/debt!

    And why do we have our cars serviced? So our cars don't become zombie cars. There's nothing quite like a car's "lifeblood" turning undead!

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  4. "We could swap out the bad oil/debt and replace it with good oil/debt!"

    If we could write this idea as a function and take the first derivative we might have something like this:

    Lehman Considers 'Good Bank/Bad Bank' Split

    "Management is in a quandary — the commercial mortgage is performing too well to be dumped in a fire sale but, yet on the other hand, the equity market appears to want it gone. "

    With a premise like that how on earth could Lehman have failed?! There simply is no end to those people who are "...paid well to help create bubbles that they could only identify in hindsight...".

    ReplyDelete