Economy and shopping in SD

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Submitted by lifeisgood on August 11, 2011 - 3:02pm

Just thought it was interesting to talk about no matter how bad the job market and economy gets in San Diego, I've never seen a decline shoppers at the malls and other various stores. Is it because San Diegans are dependent on their image or because more people have jobs than we think. It's amazing to me how packed the shopping malls are on the weekends. You would think that there is nothing wrong around here. What do you think?

Submitted by Coronita on August 11, 2011 - 3:06pm.

I don't think your average shopper has a clue on what's going on with the credit downgrade.

Submitted by BoomerAang on August 11, 2011 - 3:09pm.

I live in Carlsbad and stop by the outlets off Palomar along the I-5 every so often. It is always jam-packed around there during weekends. No parking available at all. Only time to go shopping there is right before closing on a weekday. I haven't really seen people buckle down from the economy slow down in general.

Submitted by FormerSanDiegan on August 11, 2011 - 3:16pm.

Maybe those people are walking around the mall window shopping for entertainment and spending an occasional $40 - $50. Whereas when the economy is going well, they are working at their job, ordering $100 worth of stuff from Amazon three times a week, and spending the weekends in the Wine Country or doing other weekend trips.

Maybe they are spending a few hundred bucks at Restoration Hardware on knobs for their kitchen cabinet, instead of a full-up $100K top shelf kitchen remodel.

What's missing in the perception of observing more shoppers in the mall is the consideration of what they might have been or would like to be doing/spending in a better economy.

Submitted by briansd1 on August 11, 2011 - 3:55pm.

BoomerAang wrote:
I live in Carlsbad and stop by the outlets off Palomar along the I-5 every so often. It is always jam-packed around there during weekends. No parking available at all. Only time to go shopping there is right before closing on a weekday. I haven't really seen people buckle down from the economy slow down in general.

Chinese/Asian tourists coming on tour buses make up a big portion of shoppers.

Submitted by briansd1 on August 11, 2011 - 4:02pm.

Lots of misconceptions about Mexicans.

Despite what you may think of Mexico, it's a growing middle-income country with growing urbanization and a growing middle-class.

Believe it or not, but big spenders at Fashion Valley are Mexicans.

While retailers don’t have hard numbers on how much of their traffic comes from Baja California, it is estimated that shoppers from Mexico spend about $6 billion a year in San Diego County.
http://www.signonsandiego.com/news/2010/...

The San Diego Chamber of Commerce is very focused on cross border business and the potentials for the region.

http://www.crossborderbusiness.com/publi...

Submitted by sdrealtor on August 11, 2011 - 4:05pm.

briansd1 wrote:
BoomerAang wrote:
I live in Carlsbad and stop by the outlets off Palomar along the I-5 every so often. It is always jam-packed around there during weekends. No parking available at all. Only time to go shopping there is right before closing on a weekday. I haven't really seen people buckle down from the economy slow down in general.

Chinese/Asian tourists coming on tour buses make up a big portion of shoppers.

I'm sure the Panda Express and PF Changs are huge draws for the Chinese/Asian tourists also.

Submitted by briansd1 on August 11, 2011 - 4:15pm.

sdrealtor wrote:

I'm sure the Panda Express and PF Changs are huge draws for the Chinese/Asian tourists also.

hahaha..

Go to Cabazon and watch the shoppers. There are even more Asian tourists and Asian-Americans from LA there.

Seriously, when at Carlsbad, go see where the buses park. There are cheap Chinese tours that come to SAN for the day.

I'm telling you, the world is changing thanks to the cheap Dollar. I've been on a tour with my Chinese friends. The tours are fast-paced and allow the tourists to take pictures at all the "must-see" sites.

http://7usa8.com/en/journey.aspx?Journey...

Submitted by harvey on August 11, 2011 - 4:32pm.

Lots of fairly high-priced restaurants in Temecula/Murietta are packed on weekends. It's supposed to be one of the epicentres of the housing crisis, but you'd never know the economy took a hit if you only observed the traffic in these restaurants.

It bugs my wife because I always ponder it every time we eat out. My only theory is that it is strategic defaulters with extra cash flow because they are not paying their mortgages. But I've been observing this for years, and I'm still perplexed.

Submitted by bearishgurl on August 11, 2011 - 4:34pm.

briansd1 wrote:
Go to Cabazon and watch the shoppers. There are even more Asian tourists and Asian-Americans from LA there.

Seriously, when at Carlsbad, go see where the buses park. There are cheap Chinese tours that come to SAN for the day.

I'm telling you, the world is changing thanks to the cheap Dollar. I've been on a tour with my Chinese friends. The tours are fast-paced and allow the tourists to take pictures at all the "must-see" sites.

http://7usa8.com/en/journey.aspx?Journey...

so true, brian. And also true about Mexicans flooding the malls. Mall retailers don't have to worry about credit card fees dipping into their profits with Mexicans. The vast majority pay cash. And these shoppers have an insatiable appetite for American fashion, household goods, electronics and other mdse.

In South County Macy's stores, many Mexicans buy 12-20 pairs of shoes at once during their frequent "5-hour" sales.

Great Chinese tour link, btw :)

Submitted by BoomerAang on August 11, 2011 - 4:39pm.

briansd1 wrote:
BoomerAang wrote:
I live in Carlsbad and stop by the outlets off Palomar along the I-5 every so often. It is always jam-packed around there during weekends. No parking available at all. Only time to go shopping there is right before closing on a weekday. I haven't really seen people buckle down from the economy slow down in general.

Chinese/Asian tourists coming on tour buses make up a big portion of shoppers.

i guess i'll blend in then...

Submitted by bearishgurl on August 11, 2011 - 4:45pm.

pri_dk wrote:
Lots of fairly high-priced restaurants in Temecula/Murietta are packed on weekends. It's supposed to be one of the epicentres of the housing crisis, but you'd never know the economy took a hit if you only observed the traffic in these restaurants.

It bugs my wife because I always ponder it every time we eat out. My only theory is that it is strategic defaulters with extra cash flow because they are not paying their mortgages. But I've been observing this for years, and I'm still perplexed.

pri dk, Temecula/Murietta is a lower-cost housing area. There are MANY homeowners there who DID NOT purchase their properties at high prices (they purchased pre-bubble). In addition, there are many lower-cost rentals there and even a few mobile home parks.

Not everyone has high living expenses or high property taxes. MANY people (including most Mexicans living in MX) have FAR cheaper living expenses than a "typical Pigg." Therefore, they have more discretionary income for restaurants and entertainment.

LOTS of people eat out almost daily in lower cost-of-living regions of the US. MANY eat in the SAME 1-3 restaurants night after night.

Submitted by moneymaker on August 11, 2011 - 6:16pm.

I agree lifeisgood, I too am always perplexed when I go to the mall or movies and can't find parking. Fortunately this is only a couple times of month so I soon "forget about it". My wife often hears me say "what recession" when we are driving around Costco looking for parking.

Submitted by lifeisgood on August 11, 2011 - 6:54pm.

I grew up in tennessee. I know it isn't the most sophisticated state in the country. Being in the military, I have lived in five states and I've noticed the differences in culture per state. I personally believe that san diego is more self conscious about appearance and image than other states I've lived in. Most people in other states are not concerned about how they look when they go to the grocery store. People dress well here almost as if they are worried they might run into someone they know. My opinion is that with or without cash, a lot of people are going to dress nice no matter what there income is.

Submitted by temeculaguy on August 11, 2011 - 7:13pm.

bearishgurl wrote:
pri_dk wrote:
Lots of fairly high-priced restaurants in Temecula/Murietta are packed on weekends. It's supposed to be one of the epicentres of the housing crisis, but you'd never know the economy took a hit if you only observed the traffic in these restaurants.

It bugs my wife because I always ponder it every time we eat out. My only theory is that it is strategic defaulters with extra cash flow because they are not paying their mortgages. But I've been observing this for years, and I'm still perplexed.

pri dk, Temecula/Murietta is a lower-cost housing area. There are MANY homeowners there who DID NOT purchase their properties at high prices (they purchased pre-bubble). In addition, there are many lower-cost rentals there and even a few mobile home parks.

Not everyone has high living expenses or high property taxes. MANY people (including most Mexicans living in MX) have FAR cheaper living expenses than a "typical Pigg." Therefore, they have more discretionary income for restaurants and entertainment.

LOTS of people eat out almost daily in lower cost-of-living regions of the US. MANY eat in the SAME 1-3 restaurants night after night.

Actually the low cost rental part is a common misconception. A condo that you can buy for 170k will cost you 1500 and up to rent. A 1 br apartment is at or over 1k (and can be bought for 80k). When I was renting here I marveled at how high the rents were in comparison. Had I not been strategically renting and waiting to buy, I would have moved, paid maybe 20% more in rent for a propery worth at least double. Now I'm speaking of Temecula and not areas 15 miles away that many lump in. Another exmple is my model match on my street just rented for $2600, the time between tenants was about two days. The owner bought that place for about 340K, so at most levels (small, medium and large) renting seems to be equal to costlier than buying.

But to answer the riddle of why there doesn't seem to be a slowdown locally, BG is correct on many counts, not everyone is bubble buyer and the area has churned out most of those folks years ago. This area was hit a lot earlier than most, it's been four years since the brown lawns first started showing up, it's August, I don't see any brown lawns now and my tract is dead center meltdown, being built in 2006, but there even here, the half price buyers outnumber the bubble 2-1.

I say just look at the census data, household incomes on par with Carlsbad (70k+) and mortgages at less than half of almost any area in SD county. Maybe 10% are unemployed, but the other 90% have more disposable income. Just ask the piggs that live up here, many of them probably have household incomes of over 100k and total housing debt somewhere in the 200's, maybe 300k. Life is a whole lot easier when the lion share of your pay doesn't go to housing.

And it's not just weekends, ask sdr, he and his crew came up a few weeks ago on a Sunday night. We went to a concert in the wine country, sold out for seats, we had to pay $60 each to stand in the back. My car was embarrassed to be parked alongside the hundreds of nice cars in the lot. Then we went to dinner, on a Sunday night, late, like 830 or 9, packed as well, and it was not an inexpensive place or a family place.

Some businesses have gone under and maybe more people are using their entertainment dollars locally instead of travelling this summer, but the theory that it is because people aren't paying their mortgages has lost it's legs.

An article just came out saying that it could be the local travel, that the 15 hotels are reporting a 10% increase in occupancy.

http://www.pe.com/rss/business/stories/P...

TEMECULA VALLEY Southern California Wine Country: August 8, 2011- "July saw the eleventh consecutive month of positive, local hotel industry growth," reports Kimberly Adams, Temecula Valley Convention & Visitors Bureau president and CEO. "For the month of July, room occupancy was up 15.8% and revenues were up 19.5% versus July last year. Year-to-date through June 30, room occupancy is up 10% and revenues are up 10.4%. By comparison, California - which is the Number 1 travel destination and tourism state in the U.S. - is up 5%."

So maybe it's just the tourists?

Submitted by eavesdropper on August 11, 2011 - 10:30pm.

Here on the other side of the world (D.C.), we're seeing the same thing: malls packed, high-end stores not only staying in business, but opening more branches, Whole Foods selling out of $3.00 Mexican mangos and $7.00 boxed cereals. The bridal/prom business hasn't taken a hit yet; in fact, their profits have increased at an impressive rate. What really floors me , however, is the number of new - AND very expensive - cars on the Washington beltway (and all other area roads). When we bought our Prius a couple years back, credit was still extremely tight following the screwups and bailouts. Yet, the dealer confirmed that $40,000 & $50,000 models were flying out the door. The streets of local middle- and working-class suburbs are filled with almost new fully-loaded oversized pickups that are utilized as personal/family vehicles: the average new F-350 Super-Duty is much more likely to have a payload of a gallon of milk and a couple bags of chips than it is to be carrying 30 bags of Sakrete, a pallet of pavers, and a ton of rip-rap.

The latest fast-growing trend in these parts is the two-truck family, in which the responsible parents have determined that the need for both mom and dad to each have a full-size shiny pickup to commute to their office jobs outweighs the concern for the safety and comfort of their 3 or 4 small children who are crowded into the rear truck cab seat where, although they may be forced to share seatbelts, they get to watch videos on the aftermarket DVD players that are just like the ones that dad and mom use in the front. Between the monthly installments on two truck loans, high-interest payments on the credit card used to pay the aftermarket installer, and the twice-weekly gas fill-ups, some area families are paying far more for transportation than they are for shelter.

I know that the job situation here is a little more stable than other areas of the country because of the availability of jobs with the federal government and government contractors. But there's been plenty of layoffs, and no shortage of peoples who have been laid off for two years and over. I honestly don't know where the money's coming from. Housing sales are not terribly brisk, and some neighborhoods are showing significant deterioration due to homeowner property neglect. But from the looks of things, you'd never know that we're experiencing a severe recession. The crowded shopping malls can be explained by behavior prior to the financial crisis: for many, many people here, shopping was their religion, and they came to the malls to worship. Many had inadequate incomes back then, also, but were able to acquire an endless supply of large-limit credit cards with which they could convince themselves and others of their affluence. Our malls were packed to their limits all the time back then, and articles in local publications featured residents who proudly confessed to spending 20 to 30 hours, or more, per week shopping. Since these people had no other activities in their lives, I didn't expect an overnight change. But shopping addicts aren't the same as "window shoppers": shopping addiction is based on self-gratification, which requires the satisfying of several conditions - most notably, a purchase. I confess to being puzzled by the continuing crowded conditions at the mall, unless it is a case of power shoppers who come in on Saturday and buy stuff, and then come back a few days later to return it. That would certainly explain the low profits for retail.

But the whole new car/truck thing - and not just new, but new *expensive* - has me utterly perplexed. You can't just stuff one of those in a shopping bag with the receipt, and bring it back to the retailer for a refund. Dealers are selling, and customers are buying, in a big way. The demand is so great that a huge automall is currently being built along the Beltway.

Just curious: Is this the case in SoCal?

Submitted by briansd1 on August 12, 2011 - 9:23am.

bearishgurl wrote:

Great Chinese tour link, btw :)

BG, you've said before that you like to take car trips to see the USofA.

Those Chinese tours are incredibly cheap.

You could not book the hotels and drive yourself for the same price. And even if you drove yourself, you would not have time and energy to see all those sites in the amount of time.

I really recommend that you try them once just for fun and for the experience.

I have a friend who is married to a Chinese woman and they have relatives and friends coming all the time. They've taken nearly all the tours already.

Submitted by briansd1 on August 12, 2011 - 9:31am.

Eating out is the new normal. Just like having a smart phone is the new normal. Just like leasing a car for the cheap monthly payment is the new normal.

Even designer clothe is the new normal. We now have a prolifiration of designer brands.

People expect all of those things as minimal. I believe they'd rather default on their houses before cutting back on those things.

Submitted by poorgradstudent on August 12, 2011 - 9:34am.

There's a lot of good data that in economic downturns people don't necessarily shop less, they just spend less when they do. In fact, they may actually spend *more* time physically shopping, searching for better deals and going to more stores to stretch their dollars further.

Submitted by briansd1 on August 12, 2011 - 9:37am.

eavesdropper wrote:

But the whole new car/truck thing - and not just new, but new *expensive* - has me utterly perplexed. You can't just stuff one of those in a shopping bag with the receipt, and bring it back to the retailer for a refund. Dealers are selling, and customers are buying, in a big way. The demand is so great that a huge automall is currently being built along the Beltway.

Just curious: Is this the case in SoCal?

Yes, it's the same here.
http://www.signonsandiego.com/news/2011/...

Low rates are helping auto sales as much as they are helping housing sales and homeowners.

It's all about credit. You can get 0% financing or 0.9% financing all over these days.

Submitted by briansd1 on August 12, 2011 - 10:23am.

poorgradstudent wrote:
There's a lot of good data that in economic downturns people don't necessarily shop less, they just spend less when they do. In fact, they may actually spend *more* time physically shopping, searching for better deals and going to more stores to stretch their dollars further.

That's and excellent point.

Plus shopping malls have become new public square. People like to go there and walk.

In LA, The Grove and Americana are lifestyle centers. That concept began in San Diego with Horton Plaza.

Lifestyle centers are being fine turned all over the country to drive traffic. More traffic volumes result in more sales.

Submitted by bearishgurl on August 12, 2011 - 10:37am.

briansd1 wrote:
poorgradstudent wrote:
There's a lot of good data that in economic downturns people don't necessarily shop less, they just spend less when they do. In fact, they may actually spend *more* time physically shopping, searching for better deals and going to more stores to stretch their dollars further.

That's and excellent point.

Plus shopping malls have become new public square. People like to go there and walk.

In LA, The Grove and Americana are lifestyle centers. That concept began in San Diego with Horton Plaza.

Lifestyle centers are being fine turned all over the country to drive traffic. More traffic volumes result in more sales.

About 3-4 years ago, Plaza Bonita in National City was extensively remodeled as a "Lifestyle Center." It now has a four-level parking garage and I have never been able to find a parking spot there on Fri-Sun unless I park in the "North Forty" and walk ten mins. It's packed until closing.

Sales taxes from this mall have been used extensively on NC's main thoroughfares in landscaping, brick and concrete work and also on "facelifts" for all their government buildings. NC is one fine-looking little town now :=]

Submitted by sdrealtor on August 12, 2011 - 11:06am.

Is National City the new Santee? I heard it was 10 minutes from La Jolla also.

Submitted by bearishgurl on August 12, 2011 - 11:16am.

sdrealtor wrote:
Is National City the new Santee? I heard it was 10 minutes from La Jolla also.

No, I would say it is 15-18 mins to the LJ Pkwy exit off I-5 (not during the morning rush hour).

Santee is now about 10-12 mins from that same exit on that *new* lunarscaped "SR-52" but not during the morning rush hour.

NC is only about 14 miles and Santee is at least 18 miles from said exit but there are less folks all over the place trying to navigate the exits on the "lunar hwy" :=]

Submitted by carlsbadworker on August 12, 2011 - 11:25am.

sdrealtor wrote:
briansd1 wrote:

Chinese/Asian tourists coming on tour buses make up a big portion of shoppers.

I'm sure the Panda Express and PF Changs are huge draws for the Chinese/Asian tourists also.

You think that Americanized Chinese food can attract Chinese tourists??

Submitted by sdrealtor on August 12, 2011 - 11:56am.

Cmon carlsbadworker...surely you recognize a sarcastic remark

Submitted by meadandale on August 12, 2011 - 12:16pm.

Costco and Ikea are always packed, even midday in the middle of the week. The malls are always full.

I look around San Diego and think "what recession". Clearly people are hurting somewhere but I haven't met any of them.

Submitted by briansd1 on August 12, 2011 - 12:24pm.

eavesdropper wrote:
But shopping addicts aren't the same as "window shoppers": shopping addiction is based on self-gratification, which requires the satisfying of several conditions - most notably, a purchase. I confess to being puzzled by the continuing crowded conditions at the mall

I think that shopping addiction is the same as food addiction. People don't eat less because we are in economic stagnation, and despite food inflation.

Actually, upon further reflection, things are not as bad as we think. The economy is growing slowly, so on the aggregate, economic turnover is steady and slowly increasing.

The situation doesn't feel great because we are used to higher growth.

Submitted by sdduuuude on August 12, 2011 - 12:34pm.

I noticed the same thing when we went to the movies last week.

I think the "meeting place" theory has a lot of merit to it. There is definitely a distinction between the number of shoppers and the amount of money spent.

People have been, for the last couple of years, buying down debt. Perhaps people are feeling like they are not as indebted as they once were.

Speaking personally, I am spending less money on our house, which is big-ticket stuff, allowing more for savings and little things like tickets to sporting/entertainment events, electronics and other things.

Submitted by jpinpb on August 17, 2011 - 9:25am.

I think everyone is underestimating how many people are not paying their mortgages. Yes. it is still happening and yes, banks are not filing NODs, much less foreclosing. Living for free for years gives you plenty of spendable income.

Submitted by BoomerAang on August 17, 2011 - 10:55am.

i went to the new Cinepolis luxury theaters in Del Mar last night. On a Tuesday night with tickets about $20 a person with an older movie showing, Harry Potter; it was still pretty packed. Parking was very difficult to find and there were lots of people around the general plaza there. That makes you wonder.

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