Thanksgiving evening into the wee hours of Black Friday saw me visiting three Walmart stores in five hours. This was purely research, mind you. Had I actually been seeking to buy things on this journey, I would be crazy. I am not, and to prove so, I will report on my findings.
All three stops were pleasant and largely unremarkable in the sense that the crowds were neither boisterous nor pushy. It was a calm affair. There was no anger and little apparent frustration, even as we stood in queue past 1 a.m. One rarely stands in line at that time of night with a cheerful crowd.
The checkouts were filled with toys, electronics, TVs, computer games and the like. I must report that one hapless soul stood through the checkout line with nothing more than milk, bread and lettuce. No doubt this Rip Van Winkle spent every Thursday night grocery shopping and was unaware of the onslaught of customers Thanksgiving wrought this year.
Early reports from the National Retail Federation tell us this season saw a 7-percent increase over last year’s holiday sales. So Black Friday saw U.S. consumers buying roughly $1.3 billion in goods, or about $169 per American.
If this trend continues, we’ll see each American spend a tad bit more than $1,500 during the holiday shopping season—about a quarter of all retail shopping at most major stores.
By comparison, in the height of the Great Depression, the average American spent some $20 over the holiday season. Adjusted for inflation, that would be about $360 today. We are more than a bit better off than our grandparents.
Holiday consumption today is larger, both in absolute terms (we are much richer) and as a share of our total retail spending. The reason for the latter is that as we become richer, we spend much less of our income on retail goods.
Instead, we spend a greater share of our income on such things as health care, entertainment and other personal services. In this season, we spend more as a share of our retail consumption than in decades past.
This fuels the illusion of a commercialized holiday season, which has more to do with hearts than pocketbooks. Consumption isn’t the culprit, and while we might lament times gone by, we would do better to remember that this trend started perhaps three centuries ago. That is when we started to become richer and spent our money on such lighthearted items as holiday parties and gifts.
This growing wealth saw us make other seemingly frivolous expenditures, including a third pair of clothes, toothbrushes and schooling for our daughters. The truth is that this larger choice of goods and services makes us better off as a society.
My Walmart experience did no one harm, but it did remind me that an appreciation for the bourgeois items found at Walmart remains part of the marvel of our age of riches.•
Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at firstname.lastname@example.org.