Wary Maine consumers looking for bargains

BANGOR – Only one thing will make Mainers feel better about the economy, and that’s a bargain.

Consumer confidence is falling and so are consumers’ expectations that the economy will turn around soon, according to a recently released survey by Market Decisions in South Portland.

Earlier this year, before corporate scandals and evaporating 401(k) funds became the norm, Mainers were satisfied that any recession would be short-lived.

Now they’re not so sure. The announcement last week by Ames Department Stores Inc. that it would be closing all of its 327 locations, including 20 in Maine, only added to the economic pessimism. More than 1,000 employees will lose their jobs within the next 10 weeks, right when the holiday season begins.

“Although Mainers expressed optimism about the economy … for two quarters in a row, expectations and sentiment slipped again in the most recent quarter to approximately the levels observed in summer 2001,” Vilma Galubickaite, a research associate with Market Decisions, said about the survey released late last week.

“This is due to the perception of another potentially troubled time in the U.S. and Maine economies. Given the crash in the stock market, corporate scandals and news about closing factories and laid-off workers, the decline in confidence and expectation is not all surprising,” Galubickaite added.

Shoppers want corporations to give something back. They’re tired of executives with multimillion-dollar salaries. They want to be valued by a retailer, and the only way stores can extend their appreciation is through bargain prices.

Discount stores such as Wal-Mart, Kmart and Toys ‘R Us have slashed their prices on school supplies by 300 percent or more as bait to lure shoppers: 9 cents for a 70-page notebook, 25 cents for a 24-color box of Crayons. The three competitors’ prices are pennies apart.

And at Ames, where its liquidation sale started Sunday, the sale prices weren’t even in the ballpark of the other three, according to shoppers.

“It’s not that good,” one shopper, who has three children and asked not to be identified, said of the liquidation sale. “I could go to Wal-Mart and do much better.”

Peggy Youngblood of Brewer said she thought Ames’ liquidation sale was typical, with most products discounted by 10 percent or 20 percent. A few items carried greater markdowns.

“Fifty percent off on something you don’t want isn’t much of a deal,” said Youngblood, a frequent Ames shopper.

Ames was busier than usual Sunday, according to one store employee. But shoppers were buying lower-priced items instead of big-ticket ones. Applying the discounts to items under $10 made the stop worthwhile, but adding the discounts to other items brought Ames’ sale prices equal to that of regular prices at other stores, the shoppers said.

“They’ve got to start someplace, I guess,” said Faye Hanington of Brewer.

Consumers visiting the stores on Sunday had differing views about the demise of Ames. Some blamed Wal-Mart, stating that the Arkansas-based mega-retailer is pricing competitors out of the marketplace. Others blamed Ames itself for not being able to keep up with consumer demands and low-price strategies. The company should have tried harder, they said.

“As far as Ames is concerned, you can’t have J.C. Penney prices with Kmart quality products,” said Rhonda, a Bucksport resident who did not want to give her last name.

Rhonda and her mother, Patty, of Hermon, went to the newly opened Burlington Coat Factory on Sunday, in the former HQ building in Bangor, to check out whether the clothing, linens and baby supplies company had noticeable bargains.

Patty, who did not want to give her last name, said Burlington’s opening around the same time that Ames is closing demonstrates the ebbs and flows of a free-market society.

“Things are shifting around, and it’s getting rid of the riffraff,” Patty said.

“Every high has a low,” added Rhonda, referring to the economy in the last couple of years, “and it is balancing itself out.

Rick Gray and Ralph Stacy, who were shopping at Ames with Ralph’s daughter, Julie, said they believe Wal-Mart is exerting too much influence – to the point of being a monopoly – on the discount retail environment.

“If Wal-Mart wasn’t here, they’d still be here,” said Gray about Ames.

“Kmart’s next,” predicted Stacy of the nation’s second-largest discount retailer, which is under bankruptcy reorganization. “As soon as they close, watch Wal-Mart raise its prices.”

Brenda Chasse of Presque Isle, along with her husband, Jim, said shoppers need to have a choice of what stores they can shop in. And smaller communities need stores because it’s inconvenient to travel to service centers such as Bangor to pick up a few items. Most of Ames’ closures in Maine are in towns where it was the dominant retailer. “We can’t afford to lose any more stores,” Brenda Chasse said.