Just looking, no buying

Dezember 24, 2008

America’s new consuming culture

At first sight you would not realize that there is a financial crisis. Wherever you are in America, the malls are crowded, people jostle along, push into the shops and slowly reach the vitrines. It seems to be the normal chaos around Christmas time, the climax of American consuming culture. But something just does not seem right – and not only the shop assistants see what it is. Costumers with loads of stuffed bags leaving the shops and trip out on the street got rare. Very rare. Most Americans cut their Christmas budget in half. Enforcedly. They just look, don’t buy.

There was a saying at Wall Street: „Never bet against American consumers“ . But Wall Street was proven wrong, even in this point. Consumption in America collapsed. Retail store revenue is decreasing for more than five months already. In November that sector announced the worst figures since 1982. Hopes of betterment in December have been discarded. Retail brands as Circuit City and Linens ’n Things are bankrupt and escaped into creditor protection. But the little stores are the ones that suffer the most. The owner’s despair can be seen in the ridiculous discounts they offer to woo customers to the stores. With only little success. Only the large discount department stores, like Wal Mart, withstand the recent crisis. It even seems as they would win customers. Small businesses can not keep up with these stores, even if they allow record discounts.

American Middle class wages remained static over the past years, despite the economic boom. Anyway, the US citizens were constantly consuming , piling up more and more debts, very convenient with their credit cards. Nowadays, many families suffer under enourmous burdens.  They have to bring up a vast part of their income only for redemption.  And banks are stingy with loans these days. Loans and credits were the incitement of the American consuption process. Without them the system will collapse. Even mass suspension, that dominate the news day by day impede the propensity of American citizens. Never since the Great Depression in the late 1930’s and 40’s Americans were more worried about loosing their jobs than now. The infinite confidence fades away. And thus, even the declining gas prices that remarkably  disburden most households for the past months, do not create new consumption impulses.

And the fervid snow storms of the last days who tied up large parts of the country, swept away the last hopes of the retail stores. And so, the worst Christmas business since decades comes finally to an end. Many stores are open 24/7 up until Christmas Eve.  Just another act of desperation fighting for deranged costumers.

This article is a loose transcript of an article published in „Süddeutsche Zeitung“ on dec. 23, 2008