Comments on: Fueling Up, Fueling Down http://www.howwedrive.com/2008/07/11/fueling-up-fueling-down/ Just another WordPress weblog Thu, 17 May 2012 03:19:00 +0000 http://wordpress.org/?v=2.5.1 By: Ron http://www.howwedrive.com/2008/07/11/fueling-up-fueling-down/#comment-35 Ron Sat, 12 Jul 2008 01:12:39 +0000 http://www.howwedrive.com/?p=101#comment-35 I'd say the problem with the overall economy has more to do with people no longer able to cash out the increased equity in their homes over the price of fuel. I think $4 a gallon gas is no the straw that broke the camels back. Even though it's costing people $80 to fill up their vehicles today, you still see people forking over $60 a month to Comcast for broadband, which is nearly an additional fillup per month. Starbucks poor performance has more to do with bad locations than locations with drive thrus, even though newer locations have drive thru windows, they are also poor real estate locations. I see WalMart doing the same thing, taking over many old KMart locations that used to be Caldors. Just because WalMart is there today will not make a poor real estate decision a good one long term, everyone sees store sales increase when they open a new location, but in a year or two when those stores look dirtier than the KMart it replaced will people still drag their kids through it? Same thing with Home Depot. The negative equity some people have in their homes is killing their business, maybe Home Depot overextended during the go-go years and it's starting to show on the bottom line. Home equity loans and never ending higher valuations in Real Estate distorted many businesses. -Ron I’d say the problem with the overall economy has more to do with people no longer able to cash out the increased equity in their homes over the price of fuel. I think $4 a gallon gas is no the straw that broke the camels back.

Even though it’s costing people $80 to fill up their vehicles today, you still see people forking over $60 a month to Comcast for broadband, which is nearly an additional fillup per month.

Starbucks poor performance has more to do with bad locations than locations with drive thrus, even though newer locations have drive thru windows, they are also poor real estate locations. I see WalMart doing the same thing, taking over many old KMart locations that used to be Caldors. Just because WalMart is there today will not make a poor real estate decision a good one long term, everyone sees store sales increase when they open a new location, but in a year or two when those stores look dirtier than the KMart it replaced will people still drag their kids through it?

Same thing with Home Depot. The negative equity some people have in their homes is killing their business, maybe Home Depot overextended during the go-go years and it’s starting to show on the bottom line. Home equity loans and never ending higher valuations in Real Estate distorted many businesses.
-Ron

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