What Recession? $3000 Coffee Machines Flying Off Shelves

We’re supposed to be in a recession. But does it feel like one?

In housing it does. But everywhere else, the American consumer is still spending pretty freely.

Take Best Buy (BBY). The company reported earnings today and beat analysts estimates by six cents. The numbers weren’t as good as a year ago, with earnings declining by $13 million, but given that we’re in a “recession” they were pretty solid. From Reuters:

Total sales rose 13 percent to about $9 billion, better than the $8.6 billion expected by analysts. Same-store sales, at outlets open at least 14 months, rose 3.7 percent overall. Same-store sales were up 3.5 percent in the United States and 4.7 percent internationally.

Best Buy is selling more flat panel tvs, notebook computers and cellphones.

Hmmm…yes- just the items that are “must have” if money is tight.

But then there is Williams & Sonoma (WSM). On June 4, the company reported sales that fell from a year ago. From the Memphis Business Journal:

Williams-Sonoma’s sales fell 4 percent to $781.8 million in the quarter ended May 4, down from sales of $816.1 million a year ago in the first quarter.

Profit fell to $10.5 million, or 10 cents a share, in the first quarter, down from $18.2 million, or 16 cents a share, a year ago.

The average estimate of 19 analysts was for earnings of 1 cent per share on revenues of $776.9 million.

But in the northern suburbs of Chicago, there is a different story.

I know someone who works in one of the stores and the past two weeks have been records for the store.

Could it be the stimulus checks?

It seems unlikely. Who is using a stimulus check to buy a $3000 coffee machine, one of which they sold just last week? Or a $900 copper pan set, which they also just sold?

These are items that are “luxury.” We all can admit it- that everything they sell at Williams & Sonoma you can buy for cheaper in a not-so-luxury brand at another store.

So if you MUST have some pots, Williams & Sonoma isn’t necessarily the place where the struggling person goes to purchase them (and I’m not comparing quality here- just the prices.)

Therefore the question must be asked: in this time of “struggle” and “recession” and high gas prices- why is someone buying a coffee pot for $700?

They sold one of those last week too.

As my friend who works in the store said:

“We don’t see a recession at all. In fact, it’s just the opposite.”

Obviously, this is just one store as the last quarterly numbers reflect that some of Williams & Sonoma’s stores are struggling. But maybe not as much as everyone assumes.

And maybe the American consumer isn’t as bad off as everyone assumes either. Or their charge cards are still healthy.

What IS a $3,000 coffee machine like?

I’m sure it’s a thing of beauty.

Only in America. During a “recession.”

Allegedly.