We want value. We want value wherever we can find it. That's a unifying principal among all of the quarters we've seen in retail and restaurants. It's resonating so loudly that it's like a DIN --- and I mean DIN, the symbol for DineEquity (DIN) -- because that company (which owns IHOP) fits the value paradigm.
Now, eight years out of the worse downturn since the Great Depression, you would think people would want to spend more money again. Splurge even. But like the Great Depression, this Great Recession has left scars on us -- scars that haven't gone away.
It always bugged me that my father was so chary with money, not that we had much. But we went out to dinner as a family maybe once or twice a year, typically on Mother's Day where we would go to some allegedly nice place and Pop would make it so Mom didn't have to make dinner. Of course, when we went out we had to drink water, because we weren't going to let them fool us in ordering a soda before the meal. Wasted money.
A lot of that was a total hangover from the Great Depression, where my father saw first hand what could happen with the economy and how you always wanted to be a saver, not a spender.
I think we're in as similar situation now, and that it's defining what's working and what's not. Let's take spending on furnishings. Restoration Hardware (RH) is getting killed today, down 27%. And that's on top of the stock already having been cut in half going into last night's news about how the quarter will be much weaker than expected.
Restoration Hardware makes expensive stuff. CEO Gary Friedman -- who was, in fairness, pretty subdued when he was last on Mad Money -- said that the tough January for the stock market, plus the decline in oil and the strong dollar all hurt.
Makes sense, his store in Miami catered to wealthy South Americans. Suddenly with their currencies and economies, they aren't that wealthy. His store in Houston catered to wealthy oil people. Energy and currency also hurt the Canadian operations.
Last night on Mad Money, we talked about the downfall of the stock of Williams-Sonoma (WSM). Same deal -- too expensive, no bargain.
But then listen to the call last night from TJX Cos. (TJX) and you hear about outstanding sales for HomeGoods, its value-conscious retail operation for housewares. I love my HomeGoods in Neptune, N.J. I often go in trying to buy one seasonal item and come out with three times what I thought I would get.
Let's stick with TJX. The bargains they give you in clothes are directly related to the inability of the broadline retailers to sell branded goods from VF (VFC) or Ralph Lauren (RL) or HanesBrands (HBI). T.J. Max, another store I adore (it's in TheStreet's building), gets all of that closeout merchandise, marks it up to still what's a fraction of what you would pay at the department stores and it's a terrific value.
How about food? Do you know that not one but two companies in the restaurant business -- Jack in the Box (JACK) and Popeye's Louisiana Kitchen (PLKI) (as we heard last night from CEO Cheryl Bachelder) -- cited the value offerings from the burger joints, presumably of course from McDonald's (MCD), but also Wendy's (WEN), as reasons for their shortfalls? Wendy's and McDonald's are coming in well under these guys for price. So is the aforementioned Dine Equity with its pancakes.
These are all of a piece: Whoever offers the most value wins. I know it seems counterintuitive, but it's ingrained right down to the stores we shop at and where we eat.
There's a new generation of Cramers out there, and they aren't spending as often as they used to. And when they do, they eschew the frills. They want the value or they aren't buying at all.