The six days per week economy
What's one of the first habits likely to take hold in the New Era, due to the cyclical, structural, and technological forces acting on the U.S. economy? Well, it's likely to start slowly and idiosyncratically at your local pub or salon and then take hold in strip malls and on main streets everywhere: the six days per week economy.
The first wave of the recession saw a wave of store closures, and more than a few retails chains may not survive this downturn. The second wave -- as the U.S. transitions from a hyper-consumer economy to a more balanced economy -- will involve retail and other operations closing one day a week. Some stores and restaurants are already doing this. However, while most business will go the minus-a-day route due to a lack of customers, not all will see net lower revenue. On the contrary, some might see per-day increases in revenue that will more than make up for the shorter work weeks.
Six days as good as seven?
Those who doubt that businesses can survive by not opening everyday don't recall an earlier America. For decades, in New York, Connecticut, and other Northeast states, so-called "Blue Laws" made it illegal for certain businesses to open on a Sunday. Now, though, it won't be government mandating a framework. Rather, businesses will choose when to close. For some, the least busiest day will be Monday; for others, Saturday or Wednesday, etc.
An example: A preferred, local restaurant in the Village of Larchmont, N.Y., frequented by yours truly is now closed on Mondays. The reason is quite obvious. A few months into the recession, in early 2008, the proprietor "noticed that no one was making reservations to have dinner on Monday night." Reservations had dropped about 60% on a year-over-year basis, he said, and when the slump worsened in the summer season, generally a busier time for the fave spot, he phased out Mondays.
Another: A barbershop in Bayside, N.Y., plans to close on Tuesday in addition to its usual Sunday and Monday. Being closed the extra day will reduce the shop's operating costs, which the low-traffic Tuesday sessions failed to cover.
As noted, some business will actually sees per-day revenue gains, and others will experience a better return on a cost-adjusted basis. How is this so? Because "more availability" does not necessarily equal "more revenue." Major League baseball teams found this out with their stadiums; in general, build a 55,000-seat stadium and ticket sales lag. Build a 40,000-48,000 seat park and advance sales increase, due to the threat of scarcity. For this reason, very few new Major League baseball parks (the new Yankee Stadium being an exception) seat more than 48,000 people.
And rest assured, if retailers find out they can make as much (or more) money operating six days a week as they can in seven, more stores will close a day a week than during the Blue Law era.
Economic Analysis: Two obvious winners from a new, six-day commercial schedule will be retail and restaurant workers and their families. They'll know that they'll have at least one day in the week in which they won't be at work. Among other economic and social benefits, that may lead to a more productive and energetic workforce.
What are your thoughts on the prospect of a six-day economy? Let us know what you think.