Consumption Junction

So much for consumption smoothing. Reuters:

And, in a “disturbing” trend, Castro-Wright said Wal-Mart for the first time is seeing a paycheck-related spike in sales of baby formula, suggesting consumers are rushing to buy such necessities as soon as they have the cash.

It is worth noting that Wal-mart’s automation and data-mining of their sales data is insane. If there is a spike or an anomaly among consumer behavior, they’d catch it quickly.

I wonder how well that narrative that Inequality matters less because low-income Americans have less consumption inequality is going to survive this downturn.

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3 Responses to Consumption Junction

  1. ginandtacos says:

    This supports the argument that we are currently in Stage One of a multi-stage process. People are reining in spending, either by choice or of necessity, and the effects are going to be felt in the numbers that come out next year. Now that everyone’s spooked….well, if retail-dependent businesses think that things are bad at the moment, are they not going to get much worse?

    Note how every automaker, in a desperate effort to get people on the lot, has gone back to “0% financing” at a time at which they really, *really* can’t afford 0% financing.

  2. jkm says:

    When you say the sales data mining is “insane”, what exactly do you mean?

  3. EW says:

    Back in my fraternity days, I was one the few over-21 year olds in the house. So I was constantly buying beer for my younger fraternity brothers. I probably had $10,000 pass through my hands in one semester.

    Often, instead of going to an ATM, I would keep the money and put the purchase on my cash card. Most of these purchases occurred at Walmart. So, Walmart has tracked me buying thousands of dollars of alcohol in a few short months.

    Shortly thereafter, I moved to Chicago, which has no Walmarts. So, to Walmart’s perception, I was dead — no more purchases — dead from liver failure.

    So now, every once in a while, I’ll buy something at Walmart, swipe my cash card, and yell “still alive, motherfuckers!”

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