Tuesday, June 22, 2010

What We Won't Give Up In The Recession

Folks up in the Fox Valley always used to say the area had a great hedge against economic downturns because people will always need toilet paper. But – surprise! – US News and World Report says we’re actually buying less toilet paper now than a year ago. We’re being more frugal about using it.

The magazine lists a number of things we’ve cut back on, and a few that we won’t cut back on, and at the top of the list is the portable computer. Not necessarily the flashy new iPad, but your basic, portable computer. We won’t give them up. Even homeless people log on to free wi-fi services to stay in touch. Sales of notebook computers have skyrocketed over the past three years.

Similarly, we’re not giving up our high-speed internet access. It’s one of those “microwave oven” things: once you’ve had it, you won’t give it up. And use is still expanding: one prediction is that within the next three years, more than 90% of American homes will have high-speed internet.

We’re still going to the movies, too. Ticket sales were down in 2008 but bounced back strong in 2009 and are looking good for 2010. Theater owners were concerned about losing ground to home theater systems and the wide array of DVD’s and streaming online movies available now.

In general, Americans are spending less on entertainment, but we’re watching more TV these days. Some of the increase could be more unemployed people who have nothing better to do with their time than sit in front of the tube, but the typical American now spends 18 hours a week watching TV at home.

Kitty and Fido aren’t feeling the impact of the recession. We love our pets and continue to spend money on them. Pet food, supplies, grooming, and vet care have been growing uninterrupted at about 5% a year for the past decade with no sign of slowing down.

Smoking continues to decline, and US News and World Report says we’ve cut back our spending on high-end booze. But we’re drinking more of the cheap stuff, which is typical during economic downturns. Restaurant and bar sales are down, so it’s likely that more people are drinking at home, and they’re not buying expensive beer or booze.

More people are brewing their java at home, while places like Starbucks are reporting steady declines in sales over the past couple years. The National Coffee Association says 86% of coffee drinkers are making their own at home, compared to 82% a year ago.

And, we still love our tunes. More people considered an iPod a necessity in 2009 than in 2006, despite the recession. Downloads of singles and albums are up 21% in the past year.

Retail sales are down; sales of homes, cars, and appliances are way down; we’re using less toilet paper and going out to eat less; but we still spend money on our pets, entertainment, and high-speed internet; and we’ve cut down on the $5 latte and the high-end booze.

Most of us are still finding a way to have fun once in a while; we’re just not spending as much to do it.

1 comment:

  1. It would be interesting to divine the long-term trends embodied in this report. (Accomplishing that might also be parlayed into a fortune, or at least a book and a speaking tour, but first things first.)

    Movies are a slippery economic indicator. Historically they do well during tough economic times so, in a simple world, strong ticket sales could be bad news, while a drop in movie attendance might suggest the economy is improving.

    Unfortunately for the movie makers, we do not live in a simple world. Movie theaters are still owned by big studios, but the studios are now owned by parent companies: GE owns Universal, News Corp. owns Fox, etc. A massive hit by Warner Bros. Batman in 2008 could not save Time Warner from the tank. (Time Warner's internet division, Time Warner Cable, is a whole nother company, so

    So while the popcorn noshers in the spring-loaded seats may be sending signals about the economy, the proof of whatever they are telegraphing is to be found in the bottom line of the studio parents.

    Meanwhile, TV watching may be up, but revenues are way down - because advertising is down, and that's because the ad bucks don't deliver customers like they used to. And people camped in front of their TV sets are likely actually watching rented movies - so DVD sales are down.

    The really disturbing news in this missive is the TP trend. Here's hoping it bottoms out soon.