You can tell retailers are struggling across large parts of the country just by going into the stores. Hang out around the employees long enough and you’ll eventually hear one say, “it was dead in here last night” as I did when I was shopping at a very prominent retail chain on Chicago’s Magnificent Mile just a week or so ago.

You can also tell how dead it is by the number of employees who come up to you asking if you need any “help”- which was almost unheard of in the lower priced retail stores in Chicago in recent years. I’ve never seen such attentive employees at the Gap before.

So it was with much eagerness that I planned dinner at Red Lobster, a middle tier restaurant chain, this last weekend, home of Lobsterfest.

How crowded would it be? Would we be able to tell that the economy was in recession?

Red Lobster and Olive Garden: Restaurants of Choice for Many Americans?

Red Lobster is owned by Darden Restaurants, which also owns Olive Garden, among other more “upscale” restaurants around the country.

In case you haven’t been to a Red Lobster lately, it’s not exactly “cheap.”

It is running a month long Lobsterfest promotion and most of the entrees start around $25 with the highest at $36 (which had two lobster tails plus shrimp.)

A salad or vegetable are included. But when you add on drinks, you’re looking at at least $30 per person (and more, if you have alcoholic drinks and/or desert.)

You would THINK that this type of chain would be among those hurt in this recession. After all, there’s no reason you HAVE to go to Red Lobster for dinner. You would think families would trade down to a less expensive restaurant or eat at home.

The Lincolnwood Red Lobster

My friends and I had to make a journey to a northern suburb of Chicago, called Lincolnwood, because there are no longer any Red Lobsters in downtown Chicago. It was about a 10 minute car ride on the expressway.

We got there at about five minutes to 7:00- which is the “prime” eating time on a Saturday night, especially in the suburbs.

The Red Lobster was located on the fringe of the Lincolnwood Mall parking lot- right next door to the Olive Garden.

And the parking lot was packed.

By the time we made it inside the restaurant, the wait was about 40 minutes (which DID turn out to be the “true” wait time.)

And over the next several hours, those who were waiting for a table never let up. In fact, when we left at 9:45 pm, there were still about 20 people waiting to be seated.

Recession? Not in Lincolnwood

Lincolnwood isn’t a super upscale suburb but it’s not down on its luck either. It represents a basic cross section of middle class America.

And from the number of people waiting in the Red Lobster lobby on a Saturday night- it indicated to me that many people aren’t too afraid to spend around $100 on dinner on a Saturday night.

Are the stories that the consumers aren’t spending a dime overblown?

Or was this particular Red Lobster just an aberration?

Granted, Red Lobster is a “destination” restaurant for many- meaning people go there to celebrate birthdays and graduations. Just in the nearly 3 hours we were there we saw 4 “happy birthdays” celebrated.

But those are mighty expensive birthday parties if those families are truly struggling to pay their bills.

Darden Reports Earnings on Mar 18

We’ll find out from Darden (DRI) itself exactly what is going on with its restaurants when it reports earnings on March 18. In January, the company reaffirmed 2009 fiscal year guidance which ends in May.

It had already warned earlier that profits would be down by 5% to 10% in 2009 compared to 2008, but given the economy, that’s a solid showing.

The company attributes its strong sales to its solid brands, especially Olive Garden.

Americans still want to eat out at “nicer” restaurants that aren’t fast food places and it trusts Olive Garden and Red Lobster to produce solid meals at decent, albeit slightly more expensive, prices.

Red Lobster Rocks!

My advice on Red Lobster is to get there early.

I wish we had (to avoid the wait.)

Otherwise, the warm rolls were delicious. As was the Lobsterfest itself.

I spent $35 (but had no alcohol).

That’s less than most of those around me.

Because, apparently, there is no recession in that corner of the Chicagoland area.

I was in Woodstock, Illinois over the weekend.

It’s a town of about 25,000 that is 45 or 50 miles Northwest from Chicago in McHenry County. This is farm country- or, it used to be until huge subdivisions were built nearby.

I actually drove out to Harvard, Illinois to buy some sweet corn at Twin Garden Farms (famous in Illinois for its specialty sweet corn called Mirai.) Harvard is a bit further west than Woodstock.

On the way back to Chicago, I stopped for lunch in Woodstock.

Downtown Woodstock has a famous town square that was used in the movie Groundhog Day starring Bill Murray and Andie McDowell. Remember the gazeebo? It’s still there.

The National Trust for Historic Preservation named it one of its “Dozen Distinctive Destinations” in 2007. From the National Trust:

Two historic structures dominate the town square: the Opera House and the 1857 Court House. The Romanesque-style Opera House, with its imposing five-story bell tower and stained glass windows, was erected in 1889 and today remains the town’s cultural and entertainment center, hosting plays, concerts, and performances throughout the year, including the nationally renowned Woodstock Mozart Festival.

The Court House is now home to restaurants, an art gallery, a pottery shop and the Chester Gould-Dick Tracy Museum, which honors Woodstock’s hometown cartoonist and his famed detective.

Children enjoy the Challenger Center for Science & Technology, which offers numerous programs for would-be space explorers, the city-owned Recreation Center and the Family Aquatic Center.

Not to be missed is Woodstock’s Victorian Christmas celebration that begins each Thanksgiving weekend. In a scene like a page out of Dickens, carolers stroll Woodstock’s streets while visitors bundle up for horse-drawn carriage rides around the square, and thousands of miniature lights twinkle from trees and historic buildings.

The architecture is stunningly preserved right near the square. It is as quaint as they say.

There are numerous restaurants, coffee shops and an ice cream parlor.

But what I really noticed was the number of stores that were vacant. I counted at least a half a dozen with several storefronts empty right on the square itself.

I can’t say I was surprised. While there is some housing in and near the square, what kind of retail stores would attract consistent non-tourist buyers again and again? The stores I saw (and went in) were knick-knack types of stores and antique shops.

That’s a hard business to be in right now.

Woodstock seems to be trying to attract a more upscale clientele. A few blocks from the downtown is a new converted loft building, The Emerson Lofts. These lofts were built in a converted Emerson typewriter factory. They look amazing, with huge wood ceilings, brick walls and new kitchens.

But the prices aren’t for the feint-of-heart. The smallest 900 square foot one bedrooms start in the low $200,000s and the large 2200 square foot duplex lofts are around $400,000.

In Woodstock? Those are nearly downtown Chicago price points.

What jobs support lofts at those prices? You CAN take the METRA rail from Woodstock to downtown Chicago. But it will take you about an hour and a half one way.

Woodstock’s square reminded me of the Sonoma Plaza in Wine Country in California (although Sonoma’s square is larger.) Both have historic buildings, cute shops, restaurants, and an old movie theater. Both have housing prices propped up by buyers looking for a “lifestyle” and not by the local economy.

And both have trouble keeping retail stores on the square/plaza.

Woodstock seemed especially hard hit to me.

If you get a chance, try and check it out. You can take Metra there if you live in Chicago. Spend some money.

These old towns with character should be preserved.

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.

As the government trumpeted the economic stimulus plan today of at least $600 to “most” families in the country, there is a dirty little secret.

The upper middle class gets the shaft.

If you are single and make over $75,000: too bad, so sad.

If you’re married and make more than $150,000, you don’t qualify either.

It’s not that I’m crying in my coffee for the upper middle class. Do they “need” the $600 or $1200 a month? Will they spend it or save it? If they save it, it does the economy little good.

But the plan’s limits do make me think that there are quite a few families in the high income metropolitan areas (Chicago, NY, LA, San Francisco etc.) who could actually use that money because the money situation is tight.

These are families who live in bigger homes and drive bigger cars in very expensive areas. With gas prices so high, that $1200 could have gone to filling up the SUV a few more times. Or it could have gone to furniture for the expensive little cottage or condo.

Aren’t these good causes too?

The rich don’t “need” the stimulus. But is $150,000 rich now?

Many people living in the Chicago area would laugh at the idea that $150,000 is “rich”.

And I personally know several people who are upset that they don’t qualify for the stimulus checks. It’s like hearing about a cool party and everyone is invited except you. How annoying!

Are they just greedy rich people or is their disappointment justified?

I guess there has to be a cut-off for the stimulus at some income level. Too bad for those who are “rich.” Sorry upper middle class workers. That would be you.