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Economic Pulse: Saturday Errands

Posted on : 22-02-2009 | By : Frank Eliason | In : Business, Politics


I have a background in investments, and I like to keep up on the topic.  One of my favorite authors was Peter Lynch from Fidelity Magellan fame (before people that know my background say anything, I still love Jack Bogle too!).   Peter had a simple investment style to “invest in what you know.”  It was this style that caused me to pay close attention to traffic in certain stores, or common discussion about certain businesses.  These observations can be telling whether using for investment purchases or trying to get a pulse on the economy.  That is why I am very confused by my observations today.  I think we are all concerned about the economy and we would like to have the insight as to what the future will bring.  Working off these observation can sometimes help, but today I noticed some mixed signals.

We started off with a little ride, for what was meant to be a quick trip, and turned into an all day affair.  The first stop we made was to the Children’s Clothing Patch, a small boutique.  My wife ran in for a few minutes (actually 4 games of sudoku on the blackberry).  When she came out she said that the selection was not as vast as it normally is.  I explained that is probably prudent and they are trying to minimize the need for clearance at the end of the season.  Many retailers are limiting their selection now.  We then drove to a neighboring shopping center to visit Starbucks.  On the quick ride over we past a closed Giant Foods supermarket.  The location was purchased in September, 2006 from the now closed Clemens supermarket chain.   I never did understand why they purchased it in the first place.  The store was too small and was right across the way from a larger competitor.  Giant also had a location a few miles up the road.   I did not see the closure as economic related, but I was noticing that building and those near it were not in good shape.  We were heading to the other building and it had only 3 stores still open out of about 7 to 10 spaces.  There was a restaurant, Starbucks and a bank.  What was really interesting was the parking lot was full.  The bank was closed at the time, so either Starbucks or the restaurant were doing very well at the moment.  It turns out the store we were heading to, Starbucks, was doing very well.  At least at that location.  My wife said that a woman in line was buying big bags of their deserts.  Now I like their deserts, but if I needed that many I know a number of great bakeries I would go to first.  That was an interesting observation for a Saturday afternoon trip to Starbucks, especially with all the conversation about their closing of store.

So the kids were asleep in the car this whole time, so we went for our driving to house hunt and our dreams of being able to afford a home on the Philadelphia main line communities.  This is areas like Villanova, Bryn Mawr, Ardmore, Haverford, Wynnewood, etc.  Very nice, usually older homes.  The best part to the area is the short trip into Philadelphia.  Unfortunately the negative is the expense to purchase these homes, even in today’s economy.  But it is nice to dream.  After our little drive we headed out to King of Prussia to grab a quick bite at Baja Fresh.  Not much of an observation.  We were in there with only 4 other people but the time of day was odd.  It was around 4:30.  Using the Peter Lynch approach I liked the food, but before investing I would have preferred greater foot traffic.  After we ate we ran over to pick up a few items at Costco.  Now this is one of my favorite stores.  The store uses a very consistent formula for marking up items and they strive not to go above that.  So prices are reasonable.  But they also do this really cool thing where they strive to have a certain percentage of the store to be items that make you say “Wow, I have to get that.”  They usually do get me too!  We entered the store around 5:30 and the first observation was the parking lot was packed.  We went in and there were people everywhere.  I have usually found it to be the best time to shop, but not today.  We picked up our items on the list and nothing more.  Oh wait, my wife did find they had Baby Lulu clothes for the girls so she did get them.  We then had to wait in long lines with almost every register open.  It was a lighter than normal trip for us, with a bill around $250 (this includes 2 boxes of diapers and wipes which is close to $100).   Costco seemed to be doing okay.  I did not think that people would buy bulk when they were out of work or were concerned about job security.

The next leg of this trip was to the Cheesecake Factory (we were in King of Prussia anyway).  We like to pick up 3 slices of cheesecake to go and split them over 3 nights.  As is usually the case they had a line out the door.  Where the takeout counter is you can hear the people putting in their name.  At 6:30 PM the wait time was 2 1/2 hours.  They seemed to be doing okay too.  From there we started to head home with plans to stop by the supermarket and target.  On the ride we started noticing that virtually every restaurant parking lot was packed.  Some were chains, while others were just local favorites.  Some of the parking lots were the fullest we have ever seen.  This is really where we started talking about the economy.  Well we made our way to a Giant Supermarket near us.  Normally this one is not very crowded, but today it was.  Maybe because they closed the other location.  We then went through the parking lot to the Target Greatland.  Now this is almost always crowded.  The first observation was how few cars were in the parking lot.  We went through the store to pick up a few items.  When we went to look at girls sneakers, we noticed the selection was minimal and the styles very plain.  No Dora or Princess sneakers at least (I know we should have went to Zappos!).   So we picked up our few items (without the sneakers) and left.  We were discussing the small amount of traffic for the store, so we decided to compare to Walmart.  We ran to Walmart expecting larger crowds, but to our surprise I parked in the first spot after the handicap spots.  That was a first for me.  I am always happy when I am within 50 spaces of the entrance.  So we ran in and shopped for a few more items.  We went to look for the sneakers because that is where we purchased them up in the past.  We went into shoes and what is normally 2 sides of an aisle, was now less than half of one side.  They really did not have any selection.  We did find a pair, but it was without a box in a small part of the aisle.  It looked to be more odds and ends.  Where are all the sneakers at?  Kids feet still grow.  

Anyway, I do not know what all this means for the economy, but I thought the observations were interesting.  Have you had observations in your travels that tell the future?