by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
What happens to retailers and service providers in the next recession? They are reliant in the Triangle on consumers who already owe $4.5 billion in credit card debt, an average of $10,000 to $16,000 per household. Until then, experiences are displacing things in storefronts. Alex Marshall starts with a North Carolina story to illustrate “the mutation of Main Street.”
Martha M. Jenkins opened her Kitchenworks store in 1984 in Chapel Hill, N.C., and made money for more than three decades selling muffin pans, fish poachers, coffee makers and dish brushes. As online sales began to take off, she started her own retail website, while in the store she emphasized personal service — even as she watched customers question a clerk for 30 minutes and then order an item online right in front of them. Her store closed this January. “The web is going to ruin regular retail,” Jenkins told me recently. “It is a tragedy, but probably unavoidable. It is now second nature to order online, and people can’t help it. You can combat it in a small local store, but it is taking more and more effort to keep people coming into your store.”
And the University Place mall where her store was located? Opened in 1973, it consists more and more of businesses selling services rather than things. You walk in and find people who will prepare your taxes, coif your hair, hem your pants or make a meal for you. It no longer has department stores.
Marshall provides more examples and wonders whether store hour laws, like in Europe, could help. Seems unlikely, but at least he recognizes it as an experiment.