One of this week's major headlines announced that consumer confidence has dropped to a 16-year low. Ouch. What better time to go to the mall? Even though such evidence is anecdotal, it can also be helpful to occasionally hit the pavement and simply observe -- just ask Peter Lynch.
Fools Todd Wenning and Alyce Lomax spent two hours at lunchtime Tuesday checking out a major Washington, D.C.-area shopping mall (easily accessible by car, bus, and Metrorail) in hopes of learning which stores may be holding up -- or struggling -- in these difficult times.
My Foolish colleague Rick Munarriz made an awesome joke a couple of weeks back with "This Mall Is Dead, Dude." Maybe it's not so funny, though: Zombie flicks and other post-apocalyptic scenarios did come to mind in a few of the empty or nearly empty retail stores I entered Tuesday. Creepy.
There were a few standouts though, reminding us that there are still some living, breathing human shoppers out there. Here's no surprise: Apple's
Two Apple employees asked if I needed help, and at least one other seemed available as well, indicating that it wasn't anywhere near as busy as I've seen other Apple Stores. Still, given the sad emptiness of many of the other retailers, I'd say Apple's still hot, even in these troubled times. Furthermore, its Genius Bar area had quite a crowd gathered, so it looked like some people were actually in the mood to buy Apple's stuff, too.
Another retailer that stood out for me was Limited Brands'
Todd will probably talk about this, too, but I'd say the creepiest experience in the entire mall was Abercrombie & Fitch
It's a well-documented fact that I hate the mall, but yesterday was quite pleasant. See, even though we went at a peak shopping hour, it was quiet and uncrowded, with parking available right near the mall entrance. While that was an ideal scenario for a shop-o-phobe like me, it gave me an uneasy feeling as an investor.
I had read the reports about low consumer confidence, but I still thought the teen retail segment, which is typically non-cyclical ("Daddy, can I have some money?"), would assuage my concerns for companies like American Eagle Outfitters
Perhaps that's due to higher gas prices, which are forcing parents to cut back on their teens' trips to and from the mall. Or maybe it's that teenage unemployment rose to 18.7% in May, leading to less discretionary income for the young whippersnappers. Whatever the case, teen retail looked surprisingly bleak yesterday.
One store that blew away my expectations, however, was video game retailer GameStop
If I didn't think the popularity of new gaming systems (Wii, Xbox 360, and PS3), in conjunction with high gas prices keeping people home, was a true secular shift in entertainment before, I do now.
My biggest takeaway from yesterday's store checks was that the reports are, in fact, accurate: Consumers have tightened their spending. I can count on one hand how many people I saw clutching more than one store bag. Most didn't have any.