Really nice take. I wonder if this could be a microcosm of the wider consumer economy over the last year or two. People seemed to be willing to pay any price coming out of the pandemic be it airline fares, potato chips, steak sandwiches, houses, cars, or coke. Maybe this is some kind of post-pandemic psychology where the US consumer, who is not known for great price discipline has had zero.
In a world where credit card servicing costs are up substantially with wages slowing that might be ready to change. To this point I have felt like I’m the only one saying no to a 6 dollar bag of Doritos. Do people really want to pay 25% credit card interest rates for that?
I originally said I thought there would be a spending orgy for a summer coming out of the pandemic, but it’s lasted way longer than I thought it would. This party feels like it has outlasted the booze and survived 3 visits from the local police without so much as the music being turned down.
I don't see any signs of spending slowing, but maybe that's a California thing. People seem to have more money and are more willing to spend it (probably as a result of really good wages and strong jobs market).
I think you can figure a doubling in the cost of everything since pandemic days, but especially in anything related to service (prepared food, labor, mechanics).
In that light, the $6 Doritos is about right as a $3 bag was 4 years ago, and $6 gas is equivalent to $3 gas 4 years ago.
This was the take from DRI yesterday. Their higher end consumers are buying fewer 30 dollar cocktails. You can’t extrapolate that generally based on one data point but it fits. I’ve been watching the restaurant sales data and 2 months ago it looked like it was starting to roll over then last month it came back strong. If the consumer is buckling it’s going to be a process not an event.
Supply and demand equilibrium hits the lower end consumer areas before the well-to-do and expense account crowd. But ultimately eyebrows get raised in many of them too.
Really nice take. I wonder if this could be a microcosm of the wider consumer economy over the last year or two. People seemed to be willing to pay any price coming out of the pandemic be it airline fares, potato chips, steak sandwiches, houses, cars, or coke. Maybe this is some kind of post-pandemic psychology where the US consumer, who is not known for great price discipline has had zero.
In a world where credit card servicing costs are up substantially with wages slowing that might be ready to change. To this point I have felt like I’m the only one saying no to a 6 dollar bag of Doritos. Do people really want to pay 25% credit card interest rates for that?
Brett, thanks. On the credit cards - only if that's their only means of buying it, which itself would not be good.
The pandemic party/hangover effect is very real. Here in California, gas prices near $7 add to the equation, for sure.
I originally said I thought there would be a spending orgy for a summer coming out of the pandemic, but it’s lasted way longer than I thought it would. This party feels like it has outlasted the booze and survived 3 visits from the local police without so much as the music being turned down.
I don't see any signs of spending slowing, but maybe that's a California thing. People seem to have more money and are more willing to spend it (probably as a result of really good wages and strong jobs market).
I think you can figure a doubling in the cost of everything since pandemic days, but especially in anything related to service (prepared food, labor, mechanics).
In that light, the $6 Doritos is about right as a $3 bag was 4 years ago, and $6 gas is equivalent to $3 gas 4 years ago.
I think you'll see it in the higher in certain things, like white table cloth restaurants, oddly enough.
This was the take from DRI yesterday. Their higher end consumers are buying fewer 30 dollar cocktails. You can’t extrapolate that generally based on one data point but it fits. I’ve been watching the restaurant sales data and 2 months ago it looked like it was starting to roll over then last month it came back strong. If the consumer is buckling it’s going to be a process not an event.
Supply and demand equilibrium hits the lower end consumer areas before the well-to-do and expense account crowd. But ultimately eyebrows get raised in many of them too.