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The simple fact is that people are not going to spend hundreds at stores when they have to pay $4 a gallon for gas to get to those stores. Unless we all decide we want cars that run on water, and someone actually invents that technology, spending will have to decrease in all areas of the economy. With increased demand from around the globe, and the very possibility that oil production is at a peak, we all have to get used to increased transportation costs, at the expense of the consumer economy.

That said, look for sales in areas where people don't use cars to stay robust. This includes Disney's store on 5th Ave. in New York. Taking the train into the City from such wealthy areas such as Westport, CT and Brewster, NY only costs about $25 round trip, so these people will have money to spend, and will be happy to as most NY suburbanites love an exciting Saturday in the city. As long as the prices are reasonable, expect sales for all chains at locations similar to Disney's NYC shop (i.e. areas close to mass transit and areas with strong arts/entertainment/sports districts in Chicago, Washington, San Francisco, Boston, and Philadelphia) to remain strong, but for sales at suburban malls to fall, as people won't want to spend money to drive to the mall to simply shell out more money.  

I think you"ll see a move more and more towards retail experiences (think American Girl Place). Because unless you're shopping for a toothbrush or groceries, the internet is just a more convenient option with no gas prices attached. The future of the middle is in the internet.

When I think of how Best Buy is the closest retail spot for niche DVDs, I suspect its carrying appliances has helped it quite a deal. (It seems to be popping up all over  NYC, actually). And now Blockbuster is looking to acquire Circuit City. It's a little odd but I think the appliance/electronic side of things can hold down a retail location better because it's something most people want a salesperson to help pick out and bring the thing home the same day.

Good points all. Let's explore a few of them, shall we?

1. Re. BestBuy vs. CircuitCity etc. etc. Most business analysts I've seen are basically saying that Circuit City is one of the most mismanaged companies in the entire retail universe, and that Blockbuster's late start at competing with Netflix and huge real estate committments make it an invalid too, and thus that this attempted merger is the often-seen hope of two weak companies that they'll be stronger together. We'll see, if it happens. One thing I do know--both BestBuy and Circuit City instituted interesting mixes of online/real-world marketing in the past few years but not for the reasons you might think. They both put in "buy it online, pick it up in the store" systems whereby you got the convenience of shopping and clicking-purchases online but saved the shipping costs by coming to your local store to actually pick up the merchandise. IN FACT, these transactions wound up costing them a bit MORE than either a purely online or purely in-store purchase did--more staff for the stores, less convenience and pass-along shipping costs online. So whyfor did they do it? Because they figured that getting the customer INTO the store who otherwise would have been waiting for the FedEx or UPS guy actually generated an approximate 30% HIGHER total "check" because of impulse buys or add-ons that they got "as long as I'm here" in the store but would not have purchased had they not been drawn into the store by the deal.  My personal experiences with this system at Circuit City left me totally turned off by it because the in-store people were so slow and incompetent that it took longer to stand in the special "quick-pick-up" line than it would have if I'd just gone to the store anyhow in the usual way and gotten my merchandise off the shelf, but the THEORY that this kind of hybrid marketing will draw more sales is a sound one.

2. A lot of this has to do with the KIND of merchandise being sold, too. Some things are easier to shop for online. Some things may inspire you to seek out an "expert" in a store (such as high-tech stuff if you're not very high-tech) and some to seek out a "fitting" experience with clothing, for example. BUT....there are online trends that mitigate against these issues. First, the abundance of "expert" reviews and tech explanation sites online is often much BETTER than the caliber of in-store help, even in specialist shops that pretend to expertise they often cannot afford to train well enough or pay staff well enough to deliver.  Second, liberal refund/return policies by online clothing people--led most amazingly by the thing that is hardest to "fit" by remote control: SHOES via online giants such as Zappos.com--takes a lot of the worry out of online purchases of this kind. But in general, it's like online shopping in general--5 years ago, many were afraid of it and/or of credit card security issues involved. Now, practice makes familiar and friendly, and more and more customers--especially in cities where retail is intensified and suburbs where the "big box" stores abound--are willing to take the lower and lower risk of being disappointed online.

3. Re. transportation/fuel costs for shopping trips. I get your point, CTman, but y'know, there are a LOT of people reading you in other parts of the country and choking when you call the price of a train ticket at $25 an "only" anything. It costs me about $60 to fill up my monster gas guzzler that gets about 18 mph in town and 22 on the freeway. But with 18 gallons filling it, that means a "range" on that one tank of about an average of 350 miles. Divide that by the approx $60 (which I never quite spend because I never get it utterly empty, of course, but we're using round numbers to approximate here) and that's about 17 cents a mile, roughly. So....$25 train ticket divided by 17 cents? I can go 147 miles (surely more than most round trips into/out of NYC from your area) and have a nice big trunk to fill--though of course if I was in NYC I'd be paying for parking and enduring the inconvenience of traffic etc. etc. and I, too, would rather take the train.

But the point of shopping malls and suburban "big box" conglomerations of stores was to save you and millions of others the trip in the first place. Retail stores moved with populations as they exited the cities. That was fine, but in the process, of course, what happened to the shopping EXPERIENCE as a BigBoxBrand store in California or Cleveland or Colorado or Canada looked, smelled, sounded, and tasted just like all the rest was a homogenization of that "branded" shopping experience, and when THAT tries to compete with FUN (Say, a Disney Store when they first came out--or a Rainforest Cafe or any themed retail or dining or drinking chain) well, especially once a "new" brand has matured into familiarity and is even more boring there's no competition at all. The hassle and expense isn't worth the return emotionally of the experience. So we stay home...and, as I wrote in the main article, hundreds of stores close and thousands of people look for new employment.

Human beings have congregated to shop, eat, and socialize since we first strolled over to the cave next door to kibbitz about the upcoming dino-meat crop. Village squares and country markets gave way to Petula Clark's "Downtown"'s, and then, in our post-WW2 era and especially since about the 1970's, the mall and the suburban big-box-based strip took over the task. That's why they put in the food courts and the multiplexes--all trying to simulate that old "downtown" experience of variety in ethnic foods, entertainment, and excitement. AND IT WORKED....and led to crowded parking lots, dullards for servers, and, when the original ideas were out there and popular, immitations and business concepts that boiled down to "Its just like X only we do it in BLUE instead of GOLD! We'll make MILLIONS!"

So....we're bored, the experience isn't worth the pain, the alternatives which don't have the same fun (although online networking/social sites are, in their own ways, substitutes for the communal village experience the malls once stood in for and, in THEIR own way, were inferior to as well) or the same excitement or the same originality and sense of the unexpected make up for it with predictability and reliability and safety and, yes, no train or car ordeal required.

What's next? Somebody will build a better...uh...you should excuse the expression on a Disney-themed site...mousetrap. When the shopping/eating/

socializing/entertaining experience is invented that is SO good to do and that OVERCOMES the downsides...and I certainly believe it will be since the basic economics say it'll kick butt financially....we'll go back out there.

Maybe it'll take non-petroleum-driven transportation. Maybe it'll take robot salespeople who juggle the merchandise. Maybe it'll take a "themepark" experience in shopping of the kind that Disney has been so good at creating and that companies like Disney are uniquely positioned to do because they can "test market" them in their themeparks then move them into the world at large.

Maybe it'll take merchandise we want so badly and that, to keep its cachet, they ONLY sell in stores---let's remember that "Sharper Image" began as a very "exclusive" and "trendy" and "cutting edge" catalog operation...and that their first and, they said at that time, only store was in the heart of Beverly Hills and only stocked their highest-end and trendiest toys. When they LOST that specialness, well...here they are bankrupt.

And THAT is the ULTIMATE lesson that I, for one, hope the Mouse folks will remember---you can only lose your reputation for UNIQUENESS and SPECIALNESS....ONCE.  That goes for themeparks, restaurants, movies, or....retail stores.

I can't honestly see this changing the way Disney retail is opperated in theme parks.  There are enough people that have to have souvineers from their vacations and enough people that walk in and out of stores to pass time while family members are in shows and on rides to keep them afloat.  

Now the Disney Store is a different story.  The stores seem to survive - hell, thrive -on Hannah Montana and High School Musical obsessed 'tweens.  It's gonna be interesting to see how that groups ever changing tastes effect the stores.  Maybe the smartest thing for Disney to do is move all off property retail to the web.

Re. in-park merchandise, Disney has an interesting problem to solve. On the one hand, having stores that are known for specific merchandise is a good thing: Want collector art? Go to THAT store. Want "villains" merch? Go there. Want "the big store with everything"? The "emporium" clone at a given park. The problem is...geography. WDW is just so huge and even very agressive shoppers won't/can't cover all the territory on the same trip. The answer? Well, you put the collector art stuff in 2 places...or 3...or 5.....ditto the other specialized merchandise, and oh, if somebody wants just a plainold teeshirt, well, they're HERE so why not add to the specialized store's revenue by adding that otherwise "emporium" stuff too? And before you know it...well....the blur begins. And then some suit says "Hey, we don't need all these places and people--its a waste! Let's SPECIALIZE! And the dance begins again.

Meanwhile, as we've all noted in other threads here, the "competition" from the generic Disney stuff outside the parks and at the local Wal-mart in O-town en route to the Airport is biting into the park merch action, and of course their generic-izing of all the park stuff inside hasn't helped at all, however much it may have streamlined the in-house distribution/inventory issues.

However, please note that in my article and follow-up I mentioned that the antidote to bad/stressful/boring/not-worth-the-trip retailing is EXPERIENTIAL retailing...and after all, there's a huge chunk of "experience" built into shopping inside a Disney park from the get-go. So on that score, they're way ahead.

One more point re. the fact that Disney Stores seem to be full of Hannah Montana etc. etc. or whatever the current hit is. Fact is, you can find this stuff elsewhere and sometimes cheaper. The reason why the D-stores do well with it by and large is....predictability of availability.

Consider the poor mommas out there: The kid is whining for a Hannah Doll. Mom KNOWS she can get it online but...that's a wait and the kid is WHINING. She knows she can probably get in her car and drive to Wal-mart or the "big box" strip and shop around after parking, burning gas, and dragging that same whiney kid past all the OTHER stuff they will THEN want, too. OR.................... hey, its a Disney thing, so its GOTTA be at the Disney Store. I can go on my lunch hour w/o the kid to avoid further temptation, be CERTAIN it will be there, and for that I'm willing to pay Disney's retail-retail price. The convenience and certainty of availability is worth the expense.

Of course, that was diluted when the merch of the SAME kind was found elsewhere that was similarly convenient and perhaps cheaper to boot, i.e. Wal-Mart etc. etc. The key for the Disney stores is to couple that convenience/availability/certainty factor with.....here's that word we've been using re. in-park stuff again: EXCLUSIVITY.   The issue is...with 100 or more FEWER stores as part of the downsizing, can they (a) move enough merchandise to apply the same economies of scale to more exclusive items, and (b) with fewer places to shop for it at a Disney Store now-not-quite-so-near-you, will the convenience factor be trumped and thus removed?

We'll see.

Honestly, I don't get the whole "I'm not going shopping because gas is expensive" thing ... seems ridiculous to me. I haven't changed my shopping/driving/spending habits one single bit due to gas prices.

I drive a Chevy Tahoe ... the thing gets 14 mpg and has a 25 gallon tank. Okay, so I used to fill it up for $2.50 a gallon. That cost me (assuming a dry tank) $62.50. Now gas is $3.25 a gallon, so it costs me $81.25 a tank. A whopping difference of $18.75. Even if I fill my tank four times a month (which I do) that's an extra $75.

Whoopee ... are there there really people out there who's budgets were SO TIGHT that an extra $75 a month is preventing them from going shopping??? If so, here's a news flash ... you were doing something wrong. And bear in mind, this is with a HUGE, gas guzzling SUV. If you drive a Honda the costs are probably less than half that amount.

Anyway, I do agree with John Wayne that the retail model is changing. I don't think it has much to do with tough economic times, though, because as he points out these changes have been in the pipeline for awhile. They're not in reaction to the current environment.

I just think retailers are getting smarter about their store distributions. In retail, more is not always better. You often end up robbing profits from yourself.

While I'm in a similar situation to you, Pickstar, I think you're grossly naive to think that there aren't a boatload of people in the United States for whom $75 a month is a luxury.  These are the people living paycheck to paycheck, who use check-cashing services so they can get groceries on payday instead of waiting for the check to clear, who can't save anything for retirement because there's nothing left over after rent, utilities, food, and clothing.  And gasoline.

Two thoughts here.

1) The Internet is and will continue to drive future sales. The younger (iPod) generation has embraced buying stuff online and they like it. Retail spaces and especially shopping malls are going to become more and more empty as this generation matures. I can say for me and my family, we are already spending less time in the mall than we have in years past. We go maybe once every few months now, mostly centered around major holidays like Christmas and Easter to buy clothes.

2) Variety. The in-park stores are decling in sales because there is no variety between the different stores. It used to be that each store carried certain exclusive items and you couldn't find them at other places invluding the World of Disney. Furthermore, what they are carrying is junk that nobody really wants. Give us something new and unique that we can take home and actually enjoy and won't find online for half the price.

In order for businesses to stay competitive, they are going to need to be more adept at determining what this younger generation wants and then providing it quickly. Online stores are going to need to offer something unique that can't be found at the local retailer, and vice versa. If the retail stores want to draw people in, they need to offer something in the store that can ONLY be found in the store.

This new generation is smarter, yet more fickle than previous generations. They're not going to fall for the same old junk being crammed down their thoat by the big marketing machines. The marketing campaigns of past will not work with them, a new template/model must be created to meet their demands.

LtPowers said:

"While I'm in a similar situation to you, Pickstar, I think you're grossly naive to think that there aren't a boatload of people in the United States for whom $75 a month is a luxury.  These are the people living paycheck to paycheck, who use check-cashing services so they can get groceries on payday instead of waiting for the check to clear, who can't save anything for retirement because there's nothing left over after rent, utilities, food, and clothing.  And gasoline."

How do they afford a car, then??

I mean yeah those people are out there, but they CERTAINLY weren't doing a lot of shopping with that extra 75 bucks so I say again ... I don't think that's got anything at all to do with declining retail sales at some of these places.

It's not the added cost of filling your tank with gas that is preventing people from mall and/or online shopping, it's the incremental increases in everyday purchases that are preventing people from shopping for non-essential items.  When gas goes up, then distribution costs go up.  And that means that lower and middle class people are paying more for everyday items like groceries, etc.  Therefore having less to spend on electronics, furniture, new clothing, entertainment and Disney Store purchases.  That's the basic description of a complex economic problem.

Everyone thinks that what is happening RIGHT NOW is brand new and is a NEW trend.

NO! This is the normal "boom-bust" business cycle. You have retailers (Levitz now, Montgomery Wards a few years ago) that shouldn't have been in business in the first place. They are poorly managed, have too much debt, etc. When times are good then banks have LOTS of money to extend credit and these retailers can hide their problems. BUT when times are bad, those problems become apparent and the retailer has to close.

This is a good thing! It weeds out the bad businesses and allows better businesses to take over. The consumer ultimately benefits.

I think (and have always thought, even back in the 80s when the Disney stores first opened) that the Disney stores need to be unique. If there is a Disney store in every mall (like here in the OC) then why bother? Someone mentioned the American Girl stores. That is a good example. They are unique. They are BIG. There are only five of them in the entire US. Disney should follow a similar modified model. More than 5 stores, but less than 100.

"Meanwhile, as we've all noted in other threads here, the "competition" from the generic Disney stuff outside the parks and at the local Wal-mart in O-town en route to the Airport is biting into the park merch action, and of course their generic-izing of all the park stuff inside hasn't helped at all, however much it may have streamlined the in-house distribution/inventory issues."

Believe me, I'm in a position to tell you it's streamlined NOTHING.  What the generic-izing of the park stuff has really done is maximize the profits in purchasing the products from lenders, leaving the guest with the best Disney can do with the worst stuff.

By the way, the latest rumor making the rounds among cast members is that the refurbishment of Villains N' Vogue at Hollywood Studios is going to leave that popular locale without the Villain's theming because we all know Villain's merchandise doesn't sell.  You may all now proceed to slap your foreheads and groan.  Keep in mind this is just a CM rumor and not official but it also fits in line with the current trends at Disney.

Jedited - Five American Girl stores?  I thought there was only three (NYC, Chicago and Los Angeles).  Where are the other two? (and I have keep those two a secret to my daughters)

Everything matters.  When the price of X goes up, people tend to buy less or do less of X.

An increase in the price of fuel is particularly discouraging to consumers because it is an input into so many things.  It is more expensive to go places AND to buy things once you're there.  Millions of people making small adjustments has a large impact on the economy.

People may say to themselves, "I'm going to the mall and I'll buy myself clothes if I like them, just like before."  And they go and they do buy a few things.  BUT they don't buy as much as they would have if prices had not gone up.  They may feel they have not changed their habits. but their internal calculation of whether it is worth it has adjusted.        

Pickstar says, " I haven't changed my shopping/driving/spending habits one single bit due to gas prices."

With all due respect, SOMETHING must have changed.  You are spending more on gas.  Either your income has gone up to offset the increase permitting you to continue all purchases as before, or you are spending less on something.  That something may be savings or investment.  Economists count that as one category on which you may "spend" money.  All of your income is divided into different categories and if more is devoted to one category, it has to come from some other category.

arrowyn said:

"With all due respect, SOMETHING must have changed.  You are spending more on gas.  Either your income has gone up to offset the increase permitting you to continue all purchases as before, or you are spending less on something.  That something may be savings or investment.  Economists count that as one category on which you may "spend" money.  All of your income is divided into different categories and if more is devoted to one category, it has to come from some other category."

Okay ... if you want to pick nits, then yes. OBVIOUSLY we have a little less cash sitting in our checking account at the end of each month. So I guess if you want to put a very fine point on it we're not "saving" as much as we used to. But both my wife I actually upped my 401k contributions this year and we upped the auto-investment withdrawals we have coming out of our checking accounts. So the actual amount we're truly "saving" has gone up overall. I don't count the money sitting in our checking account as true savings. It's just kinda "there."

My point was we haven't changed our consumer spending habits AT ALL as a result of the increase in energy prices.

Random notes on the great comments above:

1. When I said "streamlining" what I meant was simply this: If you are going to stock 500 items and distribute some to some stores and some to others, you have complexity built in. If you are going to stock 200 items that are generic and are sent to EVERY store, there are still the basic issues of stocking merchandise and keeping inventory control, but they are, to use my simplified terminology, "Streamlined" by that LACK of choice in merchandise and lack of diversity in its stocking venues. That's all. And that's true.

2. Re. gas inhibiting people from shopping. Will it STOP them? No. But it may diminish their trips by one or two a month. Multiply that out over millions of people, and the chances that stores have to grab an impulse buy or discretionary income go down bigtime. Re-read what I said about the electronics folks doing buy-online/store-pickup to get people INTO the stores. If that is true, and it is, then if they stay OUT of them--even one or two times FEWER per month due to higher prices of gas--then the impact over time and over a broad number of consumers compounds.

3. The issue of the cost of transportation being built into higher prices is real, folks. Everything and anything that gets TO the store via truck or train or airplane or ship has costs built in, and when oil goes up, those costs do, too. Is there a lock-step correlation? Not necessarily. The vendor may choose to eat the transport increase and lay off staff, or raise the price 10% when fuel costs go up 20% and find other economies to make up the deficit. The point made above re. credit is very true, too--sometimes in the easy-to-get-money-cheap days of recent vintage, people would borrow their way through tough times in order to gain market share or outlast competition hoping to make it up in the fat years. But with less to go around credit-wise, that isn't as easy to do.

4. With all due respect, anyone who has seen the kind of utter crapola that the allegedly-so-much-savvier "younger generation" buys these days has to be kidding to think they're "savvier" or cleverer or less easy to market to. People are people, and just because you buy via a relatively high-tech gizmo doesn't make you a smarter consumer. We have made huge progress re consumerism, ingredient listing, fraud prevention, etc. etc. compared to bygone days, but just turn on the TV any evening on a fringe channel and see the infomercials and tell me how different they are to the snake-oil pitchmen of the 1800's? Sticky tape you put on your feet to suck out pollutants? Oh, hey, its "Japanese" and based on "Ancient herbal secrets" (how many ANCIENT anybodies had sticky tape, btw?) and the list goes on and on and on.  AND YOU GET A LIFETIME SUPPLY! (just pay shipping and handling!!!) WOW!  Did I mention it's NEW and IMPROVED? And just LOOK at that SHINE!

Sorry, folks. Dumb has no age limit, sucker-ism has no generation gap. And it is part of our fate as consumers to be, occasionally, sold a bill of goods instead of quality. We live and learn--and by the way: Is ANYONE suggesting that Levitz, Sharper Image, Circuit City, etc. etc. were selling junk or defective stuff or scamming customers and that THAT is why they failed? Nope.

Not only that, there's ALWAYS somebody coming along thinking they can do it better. Sometimes they're right. Sometimes they're delusional. Sometimes they're SINCERE but delusional. That's the free market, and I love it. But we can look at it critically and draw conclusions and predict changes and act accordingly and sometimes be RIGHT.

LASTLY, re gas--its a regional issue, too. The distances in the West are just plain LONGER and the transportation options just plain fewer. Frankly, while I can drive 20 minutes to Burbank Airport and take a 50-minute flight to Las Vegas, I prefer to drive it 4-5 hours instead because not only is it about 1/3 the cost even at today's gas prices, it is more comfortable, I can "carry on" any amount of crap my big trunk and back seat can handle, I have no taxi fares to spend when I get there, and MOST IMPORTANTLY.....I don't have to put up with the ZOO that is getting into airports, onto planes, riding them, getting off them, and getting out of the airport with all my stuff intact at the other end. CONVENIENCE is sometimes as important or more important than PRICE.......but if I HAD to get there on a Friday night, I'd fly because 1 million other people are on that road and I don't want to fight with THEM, either. That's why I go Tuesday. And I can afford to and my schedule lets me.

CHOICE is the point. CHOICE. Marketing isn't just about influencing our choices, it is about PREDICTING them and CATERING to them too. Retailers who do in future will do it by creating EXPERIENCES, whether virtual or real-world, that make us ENJOY spending our money. When they don't or can't? They lose...and we do, too.

Pickstar,

Question, not to be confrontational but because I'm truly curious. You said:

"My point was we haven't changed our consumer spending habits AT ALL as a result of the increase in energy prices."

MY Question: When WILL you? How MUCH of a dent must energy price increases (and I include in this not just gas for your car, but the rise in costs for everything transported, the rise in food costs due to IMHO nonsense subsidies of ethanol corn, increases in home heating/cooling/electric bills, etc. etc.)???

Presuming that even the strongest camel's back can be broken by the right amount of straw, the question, I think, just how MUCH will it take? And what will be the "tipping point" of perception that rises are not just a fluctuation but a new reality to be dealt with? In a perfect world, of course, incomes would rise in lockstep with expenses, but we know better.

So...how much per gallon to fill up the tank will it take YOU to modify even slightly your lifestyle? And how much do you think it will take for others to do so?

On a related subject: Watching ex-American Airlines chief Robert Crandall talking about the Delta-Northwest merger yesterday, he said (and I agree) there is NO question that prices for airfare must rise to compensate for the fuel cost increases. How much will it take before the overcrowding of Air Traffic Control solves itself because travel gets too pricey for too many people and passenger numbers drop? How much will telecommuting take the place of travel if businesses have to pay too much to fly their reps around the nation or the world?

To say these changes in lifestyle will NEVER happen is silly, and I know all you're saying is that they HAVENT happened yet to you. But when/how much will they? (or is the right question, considering this location for the discussion, "whyfor?")

I don't think anyone is in the dark about the economic woes.

I don't think that anyone thought that Disney would be immune from those woes.

I always thought that the idea of Disney mercandise in every little mall around wasn't a good idea. I would rather see a few superstores around the country in locales away from Florida & California so that people who can't purchase in the parks can hit a superstore in Pittsburgh, Chicago, St. Louis, Denver, etc.

I prefer they be unique and coveted items not dime a dozen stuff you can get anywhee. That helps hold that Disney magic charm. Follow me?

Oh, well, just my thoughts.

John Wayne said:

"So...how much per gallon to fill up the tank will it take YOU to modify even slightly your lifestyle? And how much do you think it will take for others to do so?"

Not confrontational at all, JW. Good question actually ...

Look I'm not going try to be humble ... and please don't take this as bragging or anything, because it's not at all intended that way. It's merely contextual.

My wife and I earn a very good combined income. I'd guess we might be in like the top 5-10% of wage earners in the U.S., so it would take a lot to really, really affect what we do in terms of spending.

But to directly answer the question asked above (which I realize was more a general question than a specific one) I would say that gas would have to rise to maybe $5 or $6 a gallon (and bring with it all the associated negative economic impact) before we saw our lifestyle severely curtailed.

Now the one thing I will say is that we will probably use our boat less this year. Marina fuel tends to run like $1 a gallon more than fuel sold at land-based stations, which means we'll be paying like $4.50 a gallon or so. With a 45 gallon tank that adds up fast and I'd guess we might scale back there just a little bit.

It was a slow news day today, eh John?

Good article nonetheless.

valenciajoe> American Girl opened two smaller locations in Dallas and Atlanta. .: http://www.americangirl.com/stores/

Now, I can see the potential of having something like an annual Car Free Shopping Day. You show your bus pass, get a small percentage off your purchases, and bulkier purchases have an option for free or discounted shipping. Not unlike how some of the Westfield malls reimburse parking if you spend a certain amount of money there. You take transportation that runs you a couple bucks roundtrip (for Santa Monica's bus line, it's $1.50 rt and runs pretty reliably), no parking and gas costs, no traffic stress... and more money to spend. Win win.

Pickstar,

I think we're in similar "brackets" but my point is that even rich folks make CHOICES of how to spend. Personally, I have zero interest in, for example, several brands of trendy cars and clothes and things that many so-called "rich" folks like. What can I say? They just don't appeal to me. But that's another thing--seeking of status--that sometimes goes by the boards when times get even slightly tight. But there are a lot of things like that. One example? As a once-upon-a-time magazine editor I often look at who's advertising to see who a publication is really reaching because good ad buyers don't buy in publications that aren't for their target audience--likewise, I've worked on shows on the networks that I knew had 'arrived' when they began to attract mainstream companies as sponsors instead of the fringier ones who bought in when the shows were young, untested, and cheap.

Anyhow, my favorite example is "Conde Nast Traveler" which is a magazine full of glossy feature stories about castles for rent in Italy and exotic and very expensive nature trek vacations and ultimate spa luxuries, etc. etc. etc. But if you read the most pricey ads---back cover, inside covers, etc. etc.--you see that they're for seriously mid-range cosmetic companies. In short, while Conde Nast Traveler pretends to be a lifestyle magazine for the rich and/or famous, what it REALLY is....is a kind of non-pornographic "Playboy" for midwestern middleclass housewives--they dream the articles, but BUY the ads.

Anyhoo....happy boating. We all makes choices--I choose to drive a car that I like the power and comfort of in spite of the fact that it is not the most economical one on the road (and not the most prestigious either.)

Yes, trends in retail are changing.  More people shop online for a variety of reasons.  That said, people will still be going to Malls.  I know very few females who purchase clothing online because of sizing difference.  So, once you're in the Mall, you'll check out other stores.

As for the situation with The Disney Store, we stopped going there before Children's Place took over.  Why?  The lack of merchandise that wasn't geared soley to children/tweens.  When the stores first opened, we were frequent shoppers because they offered something for everyone.  When that was no longer the case, we stopped going there.

Theme Park merchandise has been awful for years.  This trend began during the redesign of Main Street, when it was turned into one giant Emporium.  There are many of us who remember when you had to visit a particular shop in a certain theme park to get the item you wanted.  Now, you can buy the same 20 items anywhere on Disney property as well as your local Wal-Mart.  Whose bright idea was this?  In just our family alone, the amount of money spent on souvenirs has been reduced to under $50 for our family of four.  I remember trips 10 - 15 years ago when we'd spend ten times that amount.

I guess when there are MBA's running everything instead of creative people, this is the result.  I'd rather spend top dollar for a unique Disney item than pay barely anything for the cheap junk they sell now.

The 'sizing' issue is also becoming less germane mostly because of liberal return/free-shipping policies. But the social EXPERIENCE of shopping for clothes is something that cannot really be replicated in online catalog sales. Remember--clothing is about selling you a self-image because wearing fashion is about projecting that image. That's why all the models in the catalogs and ads and websites are beautiful. Its also why strategic...to be strategic about it...terminology has been invented for clothing such as "portly" or "plus sizes" when we all know we actually wear a size 'extra-fries-with-that' (smile.)  And by the way, any of you who've ever shopped from a "Big and Tall" store's catalog--why IS it exactly that all the men shown are TALL but so seldom "big"? (Smile)

And I think, getting back to seriousness again a bit, that's part of the problem in the parks merchandise issues you raise, too. It isnt' a matter of MBA's vs "creatives" at work. Its a matter of...to use a politically-charged word this week..."elitism." People who USED to create special and unique merchandise for the Disney park "boutiques" were thinking, "Now what would --I-- want to buy as a special memento of my visit?" and stocking the stores accordingly. NOW, they are approaching it from a "What can WE SELL THEM" point of view--the emphasis of course being on the dichotomy between "we" oh-so-clever-and-above-all-this-tacky-souvenir-stuff EXPERT sales pro's, and THEM, the actual customers. Its the same kind of mentality that leads to the "nobody will ever notice" train of thought that delivers so many watered-down and homogenized results at WDW and environs these days.

But what's odd about it is that people HAVE noticed ... Jim told us retail sales at Disney theme parks are slumping ... so why hasn't management done anything about it?

One item that can be looked at is DVC.  DVC members return year after year.  Sometimes 2-4 times a year like I do.  If one goes multiple times a year there is no need to buy the touristy t-shirts and other things.  Money can be better spent elsewhere.

DVD is a blessing and a curse to the Disney company.

I really doubt DVC is affecting merchandise sales, because those people were likely going to Disney World 2-4 times a year BEFORE they bought into DVC (I know we were). Most people buy into DVC only after realizing they can save money on taking so many darn trips in the first place.

I mean maybe they weren't as jaded before they bought in, but that seems highly unlikely. I suspect most DVC members stopped buying significant amounts of souvenirs long before they bought in.

If anything, having access to the DVC branded merchandise might help to INCREASE their spending from where it was previously. I know it had been years since I or my wife had purchased any kind of clothing at WDW, but recently we've bought a couple of DVC items like sweatshirts, hats, polos, etc.

Yes, and for the repeat customer, having only the same-old generic park merch. is a good reason NOT to spend. Even the kids don't whine pleadingly for junk when you point out "Honey, that's the same shirt you got LAST year."

UPDATE...more major retailers cut back:

In the news today (May 1) are the following items:

Starbucks, which has been going through tough times as people facing $4 gas decide that $4 coffee is not a necessity, has announced a cutback in store expansions for the next three years. Of course, once they've begun building, it's hard to stop, so this year they'll "only" open 1,020 stores, down 155 from earlier planned openings, but they're already planning "only" 400 per year in the two following years......so we'll see how many ripples that puts in the low-wage employment and strip-mall real estate markets.

Meanwhile, Home DEPOT, which said it wouldn't close any stores...is about to. That same $4 gas and real estate mortgage 'crisis' situation, which has seen a LOT of homeowners rethinking renovation plans in light of lower valuations in a down market even if they ARE making the payments, has seen a huge turnaround in Home Depot's plans. Let's look at the chronology:

Sept. 21 2007 CEO Frank Blake told AP the company had NO plans to cut back, close stores, or lay off staff.

Dec. 2007, they announce they'll actually cut 950 jobs and close 3 call centers that take orders for home renovation services.

Jan. 2008, they announce a further 500 job cuts at their corporate HQ.

All of this came after they sold a wholesale distribution service called HD Supply to equity funds last August, of course.

And NOW? 15 Stores closing outright, including 3 in Wisconsin, 2 in Ohio, 2 in New Jersey, 2 in Indiana, and 1 each in KY, LA, MN, ND, NY & VT.  Please notice these are NOT the "major crisis" mortgage states like California and Florida and Arizona, so we'll see if this is the end or merely the end of the beginning.

They also last year closed their "Landscape Supply" brand stores and several of their "Home Expo" stores, too....but prior to this, they've NEVER closed a Home Depot store except for structural damage problems and/or replacement with a new store nearby.

Even though they claim they'll open 55 new stores in fiscal year 2009, they are charging off on their books $400 MILLION in costs related to future store development and opening--things like paying off contracted rents and committments for equipment, fixtures, and construction services related to stores they will not now open after all.  That plus $186 million in writeoffs for the store closings above, which, just to show you how this stuff ripples through the overall economy, includes things like $11 million in inventory mark-downs to liquidate the store inventory items and a bit over $8 million in severance pay.

SOooooooooooooooooo....when you see the Mouse backing off on retail in the parks or in the reaquisition of the Disney Stores, just know they're not alone...and consider the impact on theme park attendance and hotel occupancy of all these rippling rollbacks and layoffs. Some experts seem to think the "recession" (its technically not one, hence the quotes) is already on the mend in broad, overall numbers...but the after-effects on real people will last quite a while indeed.