Jul 31, 2023
1. Consumer spending roller coaster continues
- Disposable income went up slightly to 0.4% in May 2023, after 4 months of declines
- Personal consumption expenditures continues to roller coaster, at basically flat at 0.1% in May vs. +0.6% in April and +0.1% in March
2. Out with the old...legacy categories and consumer loyalty are declining, as consumers become more price sensitive
- "Serial churners" on Netflix (consumers who binge and quit streaming services) grew from 3% of subs in 2019 to +16% of subs in 2022, per a HBR article I co-wrote here. https://hbr.org/2023/07/tackling-the-problem-of-subscribers-who-bingethen-bail
- Thrill data shows the average wait times at Disney world was 33 minutes in July 2023 vs. 41 minutes a year ago. This is the lowest since January 2022.
3. In with the new...consumers are willing to spend, but on 'new and different' experiences
- COVID to Community: The WSJ notes the "Taylornomics" phenomenon, where Taylor Swift's $1B US tour is creating spending increases everywhere she goes. In Cincinnati, total adjacent spending grew $48MM per their tourism office
- Per the BLS, the monthly average # of US workers taking vacation from Jan to June exceeded 2.5MM, which was the first time since 2017
- Cybertruck pre-orders are at 1.9MM as consumers await this controversial, but compelling different product
4. While interest rates remain high, consumers...especially younger ones...will hold off on bigger ticket purchases in lieu of smaller, immediate and different experiences
- Per Moody Analytics, only 11% of homeowners have an adjustable rate mortgage...
- ...so the vast majority of homeowners have not been impacted by interest rates and have little incentive to move until rates drop
- Per Redfin, the median price of a starter home is 46% higher than in 2019. First time buyers of home will delay buying a home (and possibly having kids), and continue to spend on these smaller, immediate and different experiences
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