Sunday, December 14, 2008

the economic downturn

Well, you couldn't prove it by the tree lot this year. It's doing fabulously. Running a tree lot in Texas is always a crap shoot. Essentially it depends on the weather, most particularly the weather on the weekends.

If it is cool and dry on the weekends, the tree lot does well. If it is cool and damp - say a fog or light drizzle - less well; hot and dry, even less well; and cold and wet, not well at all. There's also a lot of variations on how long the 'season' is, depending on when Thanksgiving falls, because our tree lot, which is the oldest tree lot in Texas, if not the world (we started selling trees in 1951 or '52), opens the day after Thanksgiving. The Tree Lot, no matter what will NOT open before Thanksgiving, and certainly not just after Halloween, which is when some people think the Christmas season begins these days. (Can you hear the 'sniff!' that accompanies that?)

So this year was a short season. We were somewhat helped, I do believe, by the UT/A&M game being played on Thanksgiving, instead of the day after (our opening day), and probably by the fact that Texas positively trounced A&M this year. Usually opening weekend is kind of slow, which gives us time to 'open up' the trees, which are shipped bundled up, wrapped in a gazillion miles of polymer twine. You have to slit the twine, pull the tree upright, and somehow shake it out, to get the branches to drop into a normal position. Then you have to tie it up to a line, so it won't fall over on anyone.

Some of these trees are really big, 9' - 10' tall, and they weigh a ton, and cost a fortune. Essentially the bigger the tree, the more it costs by a geometric factor. So the smaller trees are quite reasonable: you can pick 'em up, you can afford them and they will fit in a house. The bigger ones take two people or three to pick up and carry. You gotta have a pretty big room to put them in, and I'm always happy to meet people who can pay for 'em.

Last year, the big trees, which normally sell out really fast, moved very, very slowly. That was highly disturbing, because we have the most money tied up in them. So this year, I put on my magic prognosticating hat, got a glass of wine, and decided I would order the same number of trees as last year, but smaller trees. We'd make less profit, 'cos there's less mark up on the small trees, but people would be able to afford them. And, we'd keep our prices the same as last year.

My tree suppliers were quite compliant and sold me the trees for the same price as last year. Actually they probably made a bit more money, 'cos gasoline was down, although diesel was not down as much as regular gas. And, I could use last year's price cards! I checked with the Board of the charity, and they agreed on my strategy.

So, we were wrong. The trees, wreaths, garland and tree stands flew off the lot. The big trees flew off the lot. By the beginning of last week, I was having to order more trees. Not tons more, but a few hundred. What happened? Well, we had nice cool weekends, dry for the most part. But that couldn't be all of it.

I also noticed that people were using credit cards more. Last year it was 40/40/20: 40% check, 40% credit card, and 20% cash. This year it's 80/10/5, that being 80% credit card, 10% cash and 5% check. Weird to have such a sea change in spending habits in one year. Now some of these may be debit cards, but we don't do the debit thing, and just run it all as charge. It's more expensive, but easier, and our cashiers are untrained volunteers, so we use the KISS principle.

So are folks in Texas ignoring all the warnings to pay off credit cards instead of charging on them? Are they just more optimistic than the rest of the nation? Is our economy more insulated? Are we just in denial?

My guess is that it's a bit of all four. People around here talk about how our real estate market is strong, but I think that's baloney. It's not moribund, but houses that would have been snapped up in a day or two eighteen months ago are sitting unsold for months. All the fancy pants high rise condos that are being built downtown are now exploring the option of 'leasing!' Fancy that!

Whatever it is, I'm glad people are buying trees.


Amy in Austin said...

HOLY CANOLI! She's Alive!! Welcome back to the blogosphere. Do you realize I find out more about what's going on with you FROM OTHER PEOPLE'S BLOGS than I do from you? And we live in the same town. sheesh.

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