|
...and
discovering that Wall Street's long anticipated consumer revival is nothing
more than a cruel joke, as the following reports attest:
"Recession
Generation Opts to Rent Not Buy Houses to Cars" (Bloomberg)
The day Michael
Anselmo signed a lease on his first apartment in
New York City, he lost his job at Buck Consultants
LLC. He spent about 10 months struggling to pay rent with unemployment
benefits. Two years later he’s still hesitant to buy a home or even a
road bike.
“Every
decision that I have made since I lost my job has been colored by that
insecurity I feel about the future,” said Anselmo,
28, who now rents an apartment in Austin, Texas, and works as a consultant
for UnitedHealth Group Inc. “Buying a house is just further out on the
timeline for me than it used to be.”
Anselmo and
many of his peers are wary about making large purchases after entering
adulthood in the deepest recession and weakest recovery since World War II.
Confronting a jobless rate above 8 percent since 2009 and student-loan debt
hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars
and even clothing to save money and stay flexible.
"Vacations
Become 'Staycations' in Sluggish Economy" (Milford
Daily News)
Barbecuing
shrimp and zucchini on a grill,siblings
Mirlande and Jean Cadet relaxed with their families
beneath the pines at Lake Cochituate, waiting for
rain showers to pass.
They’d
really like to fly to Paris this summer to see their sister but money has
been tight so they drove from Boston to Framingham for a family cookout.
"Unfortunately,
we can’t go there. Airfare for the children and us would be too
much,’’ said Mirande Cadet. "So
many bills: house, food, school, car insurance. How much do you pay for
gas?’’
"U.S.
Back-to-School Shoppers in No Mood to Splurge" (Reuters)
Shoppers from
New Jersey to Arizona said they were shopping for basics and making do with
last year's supplies if possible.
"Unless
the teacher says it is necessary, I am not going to get it," said Bagayoko, the 18-year-old, who who
headed to Secaucus, New Jersey from Harlem, New York, to save money on sales
tax. Her shopping cart held only pens, pencils, folders and other basics.
She is not
alone in being frugal.
"I am not
buying the swankiest of anything," said Ann Miller, 47, while shopping
for her son Zachary, 8, at the same Walmart store.
"I am feeling worse about the economy."
As school
districts with strained budgets ask parents to buy more items that in the
past would have been supplied by the schools, many parents push kids to make
do with old items, shop at discounters or buy only what they really need.
"The
school list is longer, but I am trying to get (just) the basics," said Yamila Pichardo, 35, mother of
three school-going kids, who said she plans to reuse her kids' backpacks.
"Tim Hortons Says Frugal Customers Cutting Back on
Snacks" (CTVNews)
Results may
have been even better if consumer confidence was stronger, as negative
sentiment about the economy has hit companies across the restaurant industry,
noted CFO Cynthia Devine.
"The
economic environment in both Canada and the U.S. remains volatile and the
continued uncertainty appears to be impacting consumer confidence," she
said.
"We too
noticed that some of the more moderated growth in the second quarter that
carried through into July."
Devine said
that while sales during the morning remain robust, Tims
has noticed some softness in sales during the afternoon, a trend that appears
to be consistent with a consumer looking to trim spending.
"The
consumer, if they've got to cut back a little bit during some of these
challenging times, then quite likely it's that snacking day part."
"Al's
Emporium: Fast Food Slows Down" (Fox
News)
Last week,
McDonald's reported surprising dips in same-store sales for the first time in
nine years.
Same-store
sales, which do not include revenue from new stores, is
how the restaurant industry measures growth. For McDonald's, they were down
0.1% in the U.S. In Europe they were down 0.6%, and in Asia, the Middle East
and Africa, they were down 1.5%.
Every day,
McDonald's serves 69 million customers from 33,500 locations in 119
countries. Its sales declines could mean one of two things: 1) The global
economy is picking up, so more people are switching to pricier eateries. 2)
The global economy is getting so bad that an increasing number of people
can't even afford to eat at McDonald's.
CEO Don
Thompson blamed a sluggish economy.
"Tyson
Profit Misses on Weak U.S. Meat Demand" (Reuters)
Tyson Foods Inc reported weaker-than-expected quarterly sales and
earnings and lowered its full-year outlook as higher meat prices dented U.S.
demand, and its shares fell 4.5 percent.
...
The U.S.
drought is making meat more expensive and will test demand for chicken, beef,
pork and possibly even turkey as consumer prices are expected to climb,
executives said.
Sales of beef
and pork through grocery stores and other retail outlets were down in the
latest quarter, while chicken sales were flat.
Sales of
chicken at restaurants, cafeterias and other food service customers held up
during the summer, boosted somewhat by fast-food restaurants featuring
chicken on the menu. Beef demand was softer, but was better than pork, they
said.
U.S. shoppers
have remained frugal in a still-recovering economy.
"Americans
Drop Pay-TV; Business Matures in Weak Economy" (Reuters)
Stubbornly high
U.S. unemployment, a weak housing market combined with a mature business
prone to regular programming blackouts has seen more than 400,000 American
homes drop their cable or satellite TV service since the start of the year.
"The
Smaller, Cheaper, Just-for-Us Wedding" (NY
Times)
The Wedding
Report, a market research firm, has been tracking the change, noting that in
the last year, couples participating in the company’s surveys have
increasingly reported a desire for “fun, romantic, simple, casual and
unique weddings.”
Vendors concur.
“The
backyard is the new ballroom,” said Amy Kaneko, an events planner in
San Francisco.
Stacy Scott, a
caterer in Marin County, Calif., added, “I think people are waking up
to the insanity that is the wedding market.”
The experts say
these more-intimate and often lower-cost affairs have been brought about by
the intersection of a number of trends.
First is the
relentlessly downbeat economy. The average wedding now costs more than
$27,000, according to TheKnot.com and WeddingChannel.com, with costs running
significantly higher in regions like the Bay Area and New York City. But
homespun celebrations come with substantially lower price tags.
Michael J. Panzner
|
