But I've been overthinking things lately, turning what might be a simple post into a raging debate of sorts in my head. As a result, I'm faced with the prospect of writing a lengthy blog post that gives voice to every perspective being considered in my tiny brain.
So when I'm pressed for time I opt to punt, to not write anything rather than make he effort to edit myself.
This is a long-winded way of telling you that I appreciate it when others offer thoughts as well, particularly when they articulate questions or concerns I share. Below is one of those instances. I wish the author left a name, but I won't look an anonymous horse in the mouth.
From a commenter:
I guess the major issue facing the local economy for the next year or two is the fact that not only do a vast number of local businesses depend on consumer discretionary spending, but the targeted consumer demographic aren't people who earn $12/hr but folks on the higher end of the income scale...the same folks who have been disproportionately affected by the economic downturn (if you work at Mcdonald's your job is fairly secure whereas if you work at AIG...).
It will be most interesting to see how the 'port weathers the storm. From my perspective I've already seen both fees and occupancy rates dropping at the local marinas...in my experience a good barometer of a slower summer.
12 comments:
One of the more appalling aspects of every boom is the manner in which ever larger chunks of the retail marketplace start to chase the same small slice of affluent consumers.
This leads to overbuilding of luxury homes and to downtowns where you can buy fifty types of imported cocoa but you can't buy Cool Whip.
I've always suspected this had little to do with making money and everything to do with reinforcing identity: The owners and managers of the businesses wanted to reinforce their vision of themselves as upper-class sophisticates by selling products which appealed only to themselves and their betters.
Meanwhile, the Walton family sold commodified goods to people who lacked college degrees and lived in unfashionable towns. They're billionaires, while the people who built all those luxury condos in Southern Florida ain't.
PKL, very well put. As rents start to go down, you'll start to see stores that appeal to a wider socio-economic demographic. You'd have to sell a whole lot of Cool Whip to pay the rent these days!
Given the cycle we are in, I'm sure rents in town will start to drop, if they haven't already. I think we have some good stores in town, though. I frequent the toy stores, coffee shops, card shops, restaurants and bookstores. We've also given a lot of business to the framers and Pottery Isle lately as well.
Personally, I'm happy with the variety Newburyport offers. We have a lot of retail space in town, so I don't expect every store to appeal to me and I can live with that. Stores will come and go, just as they always have, and I give most of the shopkeepers a lot of credit for taking the risk and attempting to sell their vision.
Bean's response above is an excellent example of what I tried to point out in my original comment.
Toy stores, coffee shops, card shops and restaurants are businesses that depend on discretionary income for survival.
Frame shops and Pottery Isle are DEFINITELY consumer luxury goods by any reasonable economic definition and in fact some would say* that a heavy concentration of businesses such as these are not a good omen for the local economy. In fact, it strikes me as somewhat strange that a downtown populated solely by such businesses could be interpreted by ANYBODY as healthy; when the economy is good such a business mix does well but when the economy heads south these are the items that people give up first.
The problem, if you want to call it a problem, is that the tourist/retail economy has been good for the past 10 years or so, but as we're learning it was an economic Potemkin Village based on the foolish notion that real estate prices would increase along an infinite curve(!). As a result downtown rents have increased to the point where if I wanted to open a store downtown selling underwear, socks, toothpaste, etc, I could not afford to do it, and because the landlords can't rapidly decrease rental rates without pissing off a bunch of existing leaseholders...well, you can see where this is going.
Republican weasel verbiage. Mea culpa!
If the stores shifted just a little towards 'everyday' locally consumed merchandise, food, etc. less local money would leave town and it could help compensate for expected lower tourism levels.
There have been 'buy local' impulses for a while but that was largely about 'where' to buy and not especially about 'where it comes from'. That's one reason why I have high hopes for the Farmers Market...it will provide 'locally grown/made'stuff and the money will stay local.
Ron M
Anon, show me a downtown that IS recession proof. I don't want to circle back to earlier posts, but even if the rents drop, it doesn't make sense to try and sell underwear and toothpaste in downtown Newburyport. By sense, I mean fiscal sense. Sure, it sounds convenient and all, but remember (take THAT dead horse!) big box retailers dominate that landsape.
Newburyport's downtown shops may start to cater to a less sophisticated tourist, but a tourist (out-of-towner) nonetheless. I doubt we'll see any Five and Dimes opening up anytime soon selling...pardon the 80's music humor...rasberry berets.
One more thing...you don't have to be an investment banker to be able to afford a cup of coffee, buy a card downtown or "splurge" on pottery. I think stores like the Pottery Isle can actually do quite well in a down economy. Instead of buying your wife a new iPod, go make her a nice ornament/frame/cookie jar, be creative, and relieve some stress in the process.
this is what locals have been saying for years, a tourist based economy is fool's gold...
Our demographics are ~ 1/3rd single households http://en.wikipedia.org/wiki/Newburyport,_Massachusetts#Demographics
Many in that demographic are not price shoppers in precisely the same way as family shoppers. Singles don't need a large jug of Walmart vitamins or 12 pack of paper towels.
Multiproduct convenience and variety stores do very well in cities with singles. For example a make your own salad bar,buy a light bulb,a box of Cheerios,panty hose etc. downtown might work.IMO serving that niche along with tourists is one reason that Richdales does so well.
Another anon
WANTED: Budding entrepreneur to join in a venture to sell underwear, Cool Whip, ice cream sprinkles, garden hoses, toothpaste and other sundries from a storefront in historic Newburyport. Steeped in history, and with a waterfront setting, downtown Newburyport offers an amazing setting to sell the aforementioned mundane items.
Greater Newburyport offers store owners nearly 30,000 deep-pocketed residents within driving distance. Nearby competition includes the likes of Home Depot, Wal-Mart, Lowes, K-Mart, True Value, Market Basket and several other chain stores. As pupulated and immense as downtown Newburyport is, it only offers one convenience store, a Richdale. Out of the 30,000 residents in Greater Newburyport, a whopping 5,000 are within walking distance.
Our research indicates that the other 25,000 are tired of driving anywhere from 1 to 7 miles for low prices, variety and convenient parking. They will instead drive to downtown Newburyport, search enlessly for spaces on State or Pleasant St, resign to park in one of the lots downtown or by the river and walk to our store (the store will not offer any designated parking).
Our prices will be higher than the competition because we will not have the same buying power, but the seaside charm of Newburyport makes up for that. We do not want to make the mistake of selling items that are convenient to boaters and tourists, because although their money is also green, in reality it is Fool's Gold.
When the economy turns, boaters and tourists will stay home, but we will have a lock on the locals. They, too, will feel pinched, and will seek bargains. We will fool them into thinking that the gas we saved them from driving down Storey Ave or up Route 1 more than made up for our high prices (we will not remind them that they burned more gas driving around Newburyport looking for parking).
Americans, and Newburyporters, are ready for a change. They want charming seaside villages to shun outsiders and cater instead to the local denizens. I call it "Coastal Xenephobia". Also, the prolonged recession will keep the other 4 million-plus residents in the Greater Boston area from partaking in sun bathing, cool breezes, sightseeing, bird watching, kayaking and various other recreational pursuits. Since they will not be coming to Newburyport this summer, they will most certainly not be buying ice cream cones, flip flops, t-shirts, sunglasses and books. This will afford us with potential expansion opportunities as nearby shopkeepers fold up shop. [Long term, we secretly aim to convert the entire North side of State Street into one giant "Port-Mart"].
Instead, the residents of Greater Newburyport will be buying cases of duct tape, socks, felt pens, toothpaste and underwear from the stores that once catered to the now extinct touristus dollarus. They will use these items to build barracades, "Keep Out" and "Locals Only" signs, and various other tourist traps (as well as to keep their feet warm and cozy).
Lets change downtown Newburyport for the benefit of it's citizens. No more ice cream, no more books, no more coffe shops with cozy nooks!
Please forward resume, proof of local residency and W2 statements if interested.
Bean,
I can't show you a downtown that's recession-proof, but I CAN show you a downtown that's recession resistant, and that's a downtown that has a mix of businesses catering to a mix of consumers and NOT a narrow demographic.
(And this recession appears to be different in that it is disproportionately impacting the higher-end wage earners first. I work in downtown Lawrence and I'll testify first-hand that the small business economy is doing well.)
My example of socks, underwear and toothpaste was simply a theoretical example of a business selling practical goods and not meant to be an actual business...although it seems to me that the General Store on Pleasant Street was a valid business for a while, as was the grocery store.
One of the fastest-growing chains in the USA is the Dollar Store; high volume, decent margins and a business that gets BETTER during economic downturns. I think one of those would do fairly well in downtown Newburyport (I suspect there are more customers for a business like that than any one of us would care to admit).
BUT...the rents are too high, it's a dreaded 'chain store' and there are those who'd say it didn't fit in. Under those conditions this sort of business (year-round constant business selling useful items to a blend of consumers) is effectively barred from setting up shop.
The last poster said a tourist based economy is fool's gold.... Hmmm..seems more like a record high day on the Dow to me, in that it can all evaporate terribly quickly.
Tom, I already suspect that you know my 'identity'...
Eureka! Your panacea for Newburyport is a Dollar Store! Great idea!
Dollar Tree Stores (DLTR) is doing well during this recession and has a winning formula...for now. They sell almost everything foar a $1, and make 35% margins. Do you want to know how they do it? I'll offer some thoughts that may have you reconsidering (while at the same time give Ron M something to talk about on the radio).
Dollar Tree Stores' buyers are adept at sourcing low-cost goods from China, Vietnam and varioius other 3rd world countries around the world. Almost everything they sell (aside from food) is manufactured outside of the U.S. and hauled here overseas. A lot of their food items are also imported. Not very good for the environment, and I haven't even mentioned what the goods may or may not contain.
Consider this: In November 2008, DLTR paid a $120,000 penalty to the U.S. EPA for its alleged violation of the Clean Air Act. 1.8million aerosol cans of confetti sold at Dollar Tree stores during 2004-2005 were found to contain R-22 Freon, a hydrocarbon that is harmful to the ozone and banned by the EPA. Due to the discounted nature of DLTR's products, cost-cutting incentives may result in its household products containing harmful ingredients. Consumers that are considering DLTR as a possible alternative for household items during this economic downturn may be discouraged from buying at DLTR due to safety concerns raised by the aerosol case. I know I certainly am.
Would you want household items made in China given the recent history of toxic ingredients in toothpaste, dog food, toys, etc?
If they are going to continue to sell their wares at $1, even when fuel costs, inflation, labor costs, and commodities rise, they either absorb those costs OR source even less expensive goods.
It's pretty hard to make anything in the U.S. that costs only .75 cents or less, so they will continue to find new markets for goods and drive the costs down. If oil starts to go back up towards $100 a barrel, start selling your DLTR stock!
I haven't even touched on the fact that they need high volume/high traffic to be successful. Sorry, but Newburyport does not compare to a strip mall in Danvers just off 128. As I've pointed out, there are not enough people that frequent downtown on a daily basis, or drive through, that would keep a 6,000 sq foot (that is their smallest footprint) store busy.
Not to mention that if a Dollar Store opened up in Newburyport, I think we'd all agree that it won't do much for our property values. After alll, it's the housing bubble that got us into this mess. Lets not capitulate by driving our home prices down further so we can be another Lawrence!
Ah Newburyport - 17,000 people - 17,000 visions - the eco-tourist, regular tourist, destination, daytrip, Nantucket-north, bohemian, lifestyle center, artist colony, sustainable farmers' market, fishing and suburban bedroom community and khaki-free zone.
I stand by my earlier assertion that lead water pipes have caused irreparable brain damage to our citizenry.
We should probably rename all of our parks and squares so that folks from Brookline and Cambridge are more comfortable. Market Sq becomes Washington Sq - Market Landing park the Esplanade. The Bartlett Mall becomes The Galleria. Rosie's become The Druid - no make that The Burren. Three Roads can be Coolidge Corner - and last but certainly not least - High St becomes Newbury St..."Port" also sounds a tad gritty - Newbury-by-the-sea ?
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