Changes in behavior begin with changes in attitudes. And there's no better place to build a proper attitude than in the youth of America.
Cool to Be Frugal
Professor Depew was once again on top of the changing attitudes story with point number 5 of Monday's Five Things.
We ran across an interesting piece in USA Today this morning playing right into our theme of a growing wave of resentment against consumption and a disassociation from luxury goods and symbols of wealth.Let's take a closer look at the article.
According to the article, "Teens Turn to Thrift as Jobs Vanish and Prices Rise," rising costs of typical teenage indulgences are causing teens to do something they rarely do: be thrifty. As the article notes, "It's even becoming cool to be frugal."
The stalwart retailers of teen apparel, such as Abercrombie, based in the Columbus, Ohio, suburb of New Albany, and American Eagle Outfitters Inc., are reporting sluggish sales, defying the myth that teen spending is recession-proof: It holds up longer, but can eventually fold.Teen Awareness
It's even becoming cool to be frugal.
Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch.
"It's a little tacky in the economic unrest to tote a big logo bag," said Holly Siegel, the site's senior editor. She said it's no longer about teens "one-upping each other," but rather where they can get it cheap.
Economists say this teen spending slump could be the worst in 17 years, when teen frugality led to the demise of once-hot Merry-Go-Round Enterprises Inc. and ushered in an era of flannel shirts and torn jeans.
Sales at teen retailers open at least a year averaged a 0.5% decline last year, compared to a 3.3% increase in 2006 and a 12.1% gain in 2005, according to a UBS-International Council of Shopping Centers tally. Among the few bright spots is Aeropostale Inc., whose jeans are about 30% cheaper than Abercrombie & Fitch. Candace Corlett, principal at consulting firm WSL Strategic Retail, said low-price chains like H&M and Steve & Barry's should do well.
"It is way cooler to get a super deal on that shirt rather than being able to spend the most money on something," said Anna D'Agrosa, director of Consumer Insights at The Zandl Group, a market research company focusing on teens. "Kids are becoming really aware of what is happening to their economy and to their families."
"Kids are becoming really aware of what is happening to their economy and to their families."
Every teen is going to have a friend or classmate whose parents lost their home. Walking Away Will Be The Next Mortgage Crisis. And as foreclosures skyrocket and parents lose their homes, these kids will remember it for the rest of their lives.
Secular changes in behavior start with secular changes in attitudes. That secular change in attitudes is now underway and it's not just with teens either. Many baby boomers facing retirement are half scared to death.
Greenspan had the wind of spendthrift consumers at his back. Bernanke has the wind of increasingly frugal consumers blowing briskly in his face. The implications should be obvious. Those who think Deflation In A Fiat Regime cannot happen, need to think again.
Mike "Mish" Shedlock
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