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These pages have
featured numerous reports highlighting the fact that Americans are not only
cutting back on all types of purchases -- mainly out of necessity,
but increasingly out of choice -- but they are also rethinking
their whole attitude towards spending (and saving, for that matter).
Following an era
of excessive splurging and aspirational shopping, frugality
is suddenly back in fashion. People have figured out that there
is a difference between needs and wants. And, finally, many have
cottoned on to the Depression-era reality that old can be as good as new.
Given that, the
following report from the Wall Street
Journal, "Shoppers Turn to Consignment Stores," should come as
no surprise to regular visitors to the Financial Armageddon blog.
The economic downturn
is bad for the nearby mall but good for local consignment shops. Sales at
these stores have soared since January as cash-strapped consumers look for
bargains, income and tax deductions.
"This industry
just keeps growing, but especially during slow times," says Adele R.
Meyer, executive director of the 1,000-member National Association of Resale
and Thrift Shops. "Once people find that great bargain, they're
hooked."
A recent survey of
NARTS members found that 66.2% of the stores saw sales climb from January
through August 2008, compared with the same period of 2007. The average
increase was 35%. The survey found that 85.8% of stores have seen an increase
in new customers and 74.5% are seeing new suppliers or donors.
Chris Cowman,
president of NARTS, says she has seen businesses at her two consignment
stores in the Columbus, Ohio, area increase by about 15% to 20% this year. Ms.
Cowman says shoppers typically pay about a third of what they would for
clothes and about half for furniture at retail stores.
But consumers also
are turning to consignment shops to find extra cash. People receive a payment
either when they bring in the merchandise in or when it is sold. Ms. Cowman
says she's seeing more designer brand clothes brought in. "I think
people have found out that they could get rid of something they don't
wear," she says.
Ms. Cowman also has
noticed an uptick in the number of people taking the cash immediately rather
than waiting for the typically larger amount they could receive by waiting
for a consignment sale.
Not-for-profit thrift
stores also have seen a jump in business, according to a separate survey by
NARTS. Almost half -- 48% -- of these thrift stores saw the volume of
donations increase this year, with one third of them reporting a jump of more
than a third.
"It's not just a
tax deduction," says Ms. Meyer. "It might be that people are
supporting a charity that is near and dear to their hearts."
Michael J. Panzner
Editor,
Financialarmageddon.com
Michael
J. Panzner is a 25-year veteran of the global stock, bond, and currency markets
and the author of Financial Armageddon: Protecting Your Future from Four
Impending Catastrophes, published by Kaplan Publishing.
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