DeLon and Bernie might get a little nervous, but the Wall Street Journal talks less about the DQ Macho Meal or Rick's noontime mashed potato special in Mobridge and more about the fancy $10-$20 gourmet salads and sandwiches our big-city friends like to indulge in. One New York City eatery that "caters to brokers and banker-types" reports a 15%-20% drop in lunch traffic compared to last year. At the same time, eBags.com reports a 39% June increase in lunch bag and cooler sales [see Dana Mattioli, "Bagging Lunch: The Inflation Effect," Wall Street Journal, 2008.07.16]. Of course, if you're stuffing your lunch pail with expensive processed foods (Oscar Mayer Lunchables, Doritos Snack Packs with the 2:1 air-to-chip ratio, Red Bull, etc.), you might do just as well getting the lunch special at at DQ, Rick's, or your other favorite Main Street chowhouse.
Another unexpected beneficiary of increasing frugality: the Wii. I'm no fan of home video games (mostly because if I had one, I know I'd play it 24-7 and get no blogging done), but yesterday's Marketplace Morning Report finds that the electronic gaming industry may be a bright spot for investors and for families:
Jean-Luc Renault: Inside a two-story condo in suburban Los Angeles, Eileen Dorn takes on her three kids in a game of Mario Kart on the family's new Nintendo Wii.
Video games used to frustrate her, but she's been playing a lot lately.
Not long ago, the family of five would hop into the car and head to a water park without thinking twice, but recently they've cut back. Eileen says she'd rather put money in the kids' education fund than the local gas station.Eileen Dorn: It's costing me twice as much to fill my gas tank, so every time I do it, I get an internal shudder and then I go, "I guess we're not going to do whatever it was we were thinking about doing for the week.
Instead, they've been taking more walks, dealing more hands of Go Fish and playing a whole lot more Super Smash Brothers on the Wii console they bought six months ago.Dorn: I think it's paid off in spades because where else can you get a game where a 5-year-old, a 14-year old, an 18-year-old and a couple of parents can play?
The Dorn-Wallensteins apparently aren't alone. Retail industry researcher NPD Group reports Nintendo sold twice as many Wiis last May than it did in May 2007. And this year, overall video game sales are expected to reach a record $21 billion [Jean-Luc Renault, "The Arcade Is in Your Living Room," Marketplace Morning Report, 2008.07.16].
Americans eating fewer fancy meals, making their own lunches, driving less, and playing video games with their kids. It's not perfect, but maybe an economic downturn will do us some good after all. (Hey, I'm just trying to be an optimist!)
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And now some numbers to go with your lunch:
So much for the stimulus package: with stimulus checks in hand, Americans boosted retail sales by a less than impressive 0.1 percent in June. No wonder: we were all busy just keeping up with inflation. Wholesale inflation was 1.8% in June. Of course, excluding energy and food prices, wholesale inflation was up only 0.2%, less than expected. Gee, don't you wish you could exclude energy and food prices?
Worse may be coming: if I understand the report correctly, the producer price index has shown a 9.2 increase over the past twelve months. (Be a real econ wonk: read the BLS report.) Last time the PPI was higher: June 1981, an ugly economic time. Expect those producer price increases to roll into your favorite stores any day now.