After spending the month of June paying for my shopping purchases with cash, I spend the month of July virtually not shopping at all, after a case of flu persuaded me to mostly stay away from public spaces for four weeks. You might think that on my return to shopping, I would have a long list of things to buy, and I would be eager to spend hours at it. Instead, I spent barely ten minutes browsing and bought nothing.
In most economic theory, shopping is a series of decisions about maximizing value. In reality, though, shopping is largely a habit, a practice we keep up whether we need it or not. You know this is true if you come home from the supermarket and spend ten minutes rearranging the refrigerator to make room. If shopping were simply a reaction to need, we would not go shopping for food until the refrigerator was at least half empty — or for clothes until the closet was starting to look bare.
When you interrupt a habit, the habit does not automatically come back after the interruption is over. It is easy to think of examples of this. It is a truism in the restaurant business that reopening a restaurant after months of remodeling is almost the same as opening a new restaurant. The previous regular customers are not waiting at the door when you finally open it again.
It may be a similar story with retail in general. Even if personal income can eventually return to the levels of three years ago, the shoppers will not automatically return to the stores. For some, regular shopping will have to wait until they pay off their home mortgages, and by then, they may find that they are too busy. (The talk of a recovery is speculation at this point anyway. Today’s report from the Commerce Department shows a decline in personal income in June, while consumer spending rose only because of higher prices. If the U.S. economy bottoms out in February 2010, as I have been expecting, household incomes could continue to decline for another year. So the recovery at retail may not get rolling until 2012 — but like any economic forecast that far in advance, that’s little more than a guess.)
Peer pressure is one force that drives people to shop. If everyone else has new clothes, I need new clothes too — but this year, no one seems to be wearing new clothes. And what if new clothes is just a fashion trend that has run its course?
What will the world look like if people forget to go shopping the same way they’ve been forgetting to go to the health club? It could happen — and it could change the shape of the edge of town.