Studies during the current and past recessions show that when they feel their wallets under siege, consumers tend to switch from premium, name brands to cheaper brands, generic and shop brands, and from high-end retailers or regular stores to discounters – in other words, from Advil to generic ibuprofen or a store brand; from Macy’s (USA) or David Jones (Australia) to Target and Wal-Mart.
Which seems obvious and perfectly sensible. Somewhat less obvious is the fact that consumers tend to stick with these new consumer choices even when the economy picks up again. Not all of them, but enough to make statistically significant shifts in market share for various brands and stores.
So, during the current economic crisis, we can expect to see people switching from their local pharmacy to Walgreen’s and Wal-Mart, from the local bookstore to Border’s and Amazon.com – and then staying there. The long-term implications – and even the immediate effects – are dire.
Consider the bookstores the San Francisco Bay Area. Already feeling squeezed by Amazon.com, the effects of the economic downturn and then crisis broke the backs of many of the local independent bookstores, some of which had been in business for half a century.
Last Summer, one of the best independent bookstores in the United States, Cody’s closed for good after 52 years of business in Berkeley. Another Berkeley institution, Black Oak Books, went through a steep decline, changed hands, and then lost its store. It’s still in business, barely, as an online presence, but the institution, the experience that so many of us loved and made a regular part of lives for decades is gone for good.
Both Black Oak and Cody’s were important institutions in the social, culture and intellectual life of Berkley and the Bay Area. In addition to their vast, diverse stock of books, both stores had regular book and poetry readings and other events, and were key stops on the book tours of most national and international authors. Many people will have heard their first live poetry at one or the other these stores. And beyond that, there was the serendipitous occurrences possible in stores like this, which big, commercial chains seem to lack and online stores can’t really provide – the mis-shelved book which you never would have come across otherwise, the chance conversation with another customer…
All of that is gone. And more it that will be lost to the storm of the current financial crisis, as local and independent stores find their cash reserves, and ability to slash prices, borrow and run at a loss are all unequal to the resources of their large corporate chain competitors, and as consumers, trying to keep afloat, shift to cheaper sources.
The implications are profound and extensive. Wal-Mart has a terrible record on workers’ rights (see, eg, here and here). Large chains like Blockbuster Video and Wal-Mart have shown themselves to be very susceptible to pressure around “sensitive” material – for example, declining to stock material with gay/lesbian content. And so on.
Many of us have to tighten our belts and make changes in our consumption habits to get through the financial crisis, but if in doing so we damage the long-term social and intellectual well-being of our communities, it will be a serious blow.
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- American Booksellers Association
the national trade association for independent booksellers — since 1900. ABA offers education, services and products, advocacy, and relevant business information.