The retailers’ tale

Well I went to the mall on Sunday and bought a disposable fountain pen for £3.20. Big deal. Getting to the mall and back by car cost used £5-worth of petrol* . Then there was the £6.50 two coffees and a slice of shortbread, plus about £40 on a tin of paint, a light fitting, some sandpaper, and a notepad and birthday card for a friend’s daughter.

So a bit under sixty quid in a three-hour sojourn at the coalface of consumerism. Not a great economic return on the £20 million-worth of cars gathered around it, plus whatever it costs to keep the place running seven days a week. Although by recent standards, the mall was decently decked-out with people, you couldn’t always call them ‘shoppers’ since there seemed to be many more of them in the thoroughfares and coffee bars than in the shops.

At least a dozen units, including some anchor locations, were closed. My wife said she’d only counted six shuttered units a couple of weeks ago. The mall operators had got round to boarding-up about half the closed units. Printed across the hoardings were slightly larger-than-life images of artfully minimalist shop window displays. They showed frocks, shoes and handbags in oddly muted colours – as if apologising for drawing attention to the two-dimensionality of retail gratification.

Several of the stores had closed in the past few days. Monsoon and East had evidently decided they had too many outlets for today’s demand for massively marked-up garments imported from the low-wage countries, as somewhat cynically evoked by their brand names. Stripped of stock, fittings and twinkly display lighting, the vacated units looked cramped and ugly. But the gods of retailing abhor dark spaces far more than ugliness so each empty space was bathed in a wan glow seeping from a few basic light fittings.

Notices taped to windows still streaked with dust left by the removal men varied from brashly informative, poster-sized placards – “You can still visit us at Canary Wharf!” (just 120 miles away) – to shamefaced bits of A4, apparently knocked out on the stockroom inkjet moments before it was hauled off to head office. Few people looked at the notices, let alone past them to the stripped-out interiors. Who wants to see the dreary concrete and steel carapaces encasing the brightly lit fantasy of each carefully-differentiated fashion brand? Who wants to see the cheap sameness of production, margins, distribution, positioning, promotion and ‘loyalty-building’ laid bare by the pitiless emptiness behind dirty plate glass?

In any case, what good are repeat customers if they’re too broke to take advantage of the volume-related discounts that masquerade as loyalty? We are in a deflationary depression. Hardly any of the expanding supply of funny money from central banks is finding its way into people’s pockets. With every passing year, more people are corralled into shopping for necessities alone. Fewer and fewer have spare cash to shop at Karen Millen and Cecil Gee, even though they still have the inclination to do so.

Ironically, the primary reason for the death of the retailers in the mall on the hill was scattered thickly across its windswept car parks. Without cars, the out-of-town retail park wouldn’t exist. But with cars, the customers can’t afford to buy the goods. Cars are a commitment to waste. Day in and day out they cost the average owner £14 in fuel, bills and depreciation. Cars spend 95% of their time doing precisely nothing. That’s 13.30 a day, £93 per week, £4,840 a year to do nothing apart from suck up money.

But unless people maintain their financial commitment to personal mobility, going to the mall would be half the fun for twice the price. Going there by train and bus instead of by car would have taken us twice as long and cost about twice as much as the roughly 45p per mile it costs to run the car. The bottom line is the mall’s future is tightly tied to the future of cars-first transportation. In a future where cars-first transportation probably won’t exist, there will be no rationale for places like the mall.

Significantly, several of the outlets that have recently abandoned the out-of-town mall have moved to units at its new town-centre rival. That place doesn’t have ‘easy surface parking’ or a major motorway running right past it but it’s slap bang in the heart of the city, surrounded by hundreds of thousands of people who could … at a pinch … put a couple of thousand quid of shopping money in their pockets each year by chucking-in car ownership.

That’s a calculation more people are starting to make. And of course, if fewer people drive in cities, the cities become more liveable. Then moving retail … or what’s left of it …to the centre makes more sense. Unfortunately, the economy is so utterly geared to driving that moving away from a cars-first lifestyle will cause a long period of stagnation punctuated by brief upticks and occasional crashes. But the end of affordable oil has baked that scenario into the cake anyway.

The spiral is self-reinforcing. Less driving = less money. Less money = less retailing. Less retailing = less money (in a so-called ‘consumer’ economy). Less money = less retailing. Rinse and repeat. Until or unless energy starts getting cheaper again (and there is no reason why the fossil energy that powers 90% of global industrial civilisation will get any cheaper), that process will inexorably accelerate.

For a while to come, places like the mall will be able to mask the decline with dressy pictures of dressed-up windows that disguise the gaps in their pearly smiles. But eventually the point will come when someone has to weigh up the costs of constructing a really good public transport link out to the fringe mall (say a tramway) against the obvious and far cheaper expedient of moving the flagship retailers back to where the people already are – which of course would be the end of the out-of-town retail park.

Me? Well apart from a bottle of perfume my wife chose as a present to herself from her mother there was nothing we couldn’t have bought online, or in our nearest town. We went because we still have a modest amount of time, money and fuel to waste. When we don’t we won’t. And that will be another tick on the countdown to the end of car-dependent retailing.

* £5 is what it cost to buy it. Arguably such a fantastic store of lightweight, transportable energy is worth much more than a fiver

Budget 2013 spawns another wave of zombies

What does a big house-building business say when it’s given a big stack of cash by its best mate?

“Thanks, Gov.”

Yes, the Tories’ latest wheeze for transferring wealth to places where much wealth already exists is a Help for house-builders scheme whereby we the taxpayers get to backstop highly inflationary loans dished out by the government to facilitate dubious deals on overpriced, shoddily-built houses.

Oh, there’s plenty of pie in the skies above the fields where sprawling rural slums are about to spring up. We’re promised that the scheme will kick start growth, cure the housing shortage and make home ownership more affordable.

That’s all complete bolleaux, of course. One analyst, Ian Williams of Peel Hunt, told the FT:

“As a policy for driving economic growth – limited. For solving the national shortage of housing – no impact. For wrecking long term affordability of housing – tremendous.”

But desperate times call for desperate handouts. The government’s back is against the wall and the hot breath of its corporate masters is caressing its neck. So now the zombie banks will be joined by zombie house builders: staggering blindly onwards until someone cuts the tubes through which they mainline public revenues that could otherwise go to the commons.

This is where 30 years of hypertrophic waste-fuelled growth has got us. A nation of homeowners (© M. Thatcher) for whom “ownership” adds up to paying a mortgage averaging £100,000 due to the ludicrous level of house prices.

And now with the added pleasure of watching more of our taxes being funneled to the same construction firms and banks whose greed and ineptitude was instrumental in creating the mess we’re in.

There is a real late-Roman-empire feel to our situation. The handouts get more blatant as the rhetoric gets more populist. Meanwhile real incomes stagnate and affordability drops ever faster as the people in charge frantically try to prop up asset prices.

It’s not the barbarians at the gate we should be worried about. It’s the zombies in the city.

Signs of the times

With apologies for the clichéd title, here are three stories encapsulating the way things are going.

Into a hole. For every £2.50 UK councils spent on repairing potholes, last year, they paid out another £1 in compensation for damaged wheels and tyres. Infrastructure gets thrown under the bus because the energy cost of keeping the industrial show on the road exceeds affordable inputs. Story is PR for the Asphalt Association but they do have a point.

Freedom of choice. Food labelling ain’t necessarily helpful, (joke: “I don’t eat beef … as I recently found out”) but in Mississippi they’re actively trying to ban it. Presumably in the name of freedom. Assuming that freedom is a synonym for encouraging wilful ignorance.

Pope Poor the First. As the world’s biggest religion gears up for the first-ever 72-seater Popemobile, it’s good to have a leader who’s down with his flock rather than tucked up with the rich folk on the hill. And with bus travel creeping steadily up on the (formerly) middle classes, Francis 1 is an example to us all.

Our future. All bets are now off

For the past 300 years, all bets on the future were pretty safe.

Every one was fully backed by all the energy and resources anyone could ever need.

As time went on and technologies developed, the bets could be ever more outrageous and still look likely to come off. Holidays on Mars? Mining the moon? Why not?

And then, just about the time the people in charge convinced themselves that everything could keep growing exponentially for ever, it stopped.

All bets are off. The futures we imagine for ourselves will be made out of what energy and resources we can get, not whatever we want.

Which means that things are going to get rough.

It’s a bit of a loose analogy, but think of human civilisation as a train and the natural world of energy and physical resources as the track it runs on. (John Michael Greer explains it better as the primary, secondary and tertiary economies[1] … but I need a train for this one).

Over the past three centuries, the train has grown from a push-along truck to a steam loco with open-top carriages to a massive, hurtling, high speed juggernaut that doubles in size every 15 years.

Meanwhile, the track, being natural, was always going to follow a growth-maturity-degrowth curve. Guess where we are now?

About 50 years ago, one or two voices started warning that the ‘track’ wouldn’t provide the power or carry the weight for ever. They were ignored.

About 30 years ago, other people worked out that the track would start losing its integrity in about another 30 years’ time. They were derided.

Six years ago, Empire Central asked a well-qualified expert what was over the next rise. He said it was a flaky trestle bridge with ties dropping off.

He recommended taking urgent steps to reduce the mass and velocity of the train. This time some people listened but the train company lobbied strenuously and effectively for momentum to be maintained.

Now we’re starting to feel the first jolts as the track begins to degrade. We may make it across that first trestle bridge but there will be more, flakier ones to follow. Meanwhile the engineers are pressing the throttle hard while the track gradually thins down from steel rails and teak ties to bamboo rods and pea sticks.

And we can’t get off the train so we’re all going along for the ride.

The Archdruid Report – The Economics of Entropy

The primary economy … is the natural world itself, which produces something like three-quarters of the goods and services on which human beings rely for survival. The secondary economy, which depends on the primary one, is the collocation of labor, capital plant, and resources extracted from the primary economy that produces the other quarter or so of the goods and services human beings use. The tertiary economy, finally, is the system of social processes by which the products of the first two economies are allocated to people.