Background
Personal spending has recovered to pre-pandemic levels. There are clear winners and losers – think grocery stores vs. airlines. One area in which Americans’ spending is particularly resilient and in some cases above pre-pandemic levels is the “sin” categories like gambling and alcohol. This examines where sin spending rises with COVID.
Findings
- Bad things in our mouths: Alcohol purchases for in-home consumption jumped in March and never declined (currently up 15% in October vs. the February pre-pandemic baseline). Fast/takeout food initially dropped but is now actually up 4% vs. February.
- Bad things in our lungs: Tobacco spending is up 4%. This is surprising, because as the year began the tobacco industry expected a decline in usage given both long term trends, and the federal law enacted that set a minimum age for tobacco purchase of 21 years. Apparently stressed stay-at-home workers and parents have upped their consumption.
- Crappy year? Try for craps: Casino gambling revenue initially tanked when they had to close their doors during lockdown. But with reopening, Americans have flocked to the gaming tables. Revenue is now trailing pre-pandemic levels by only 9%.
- Nursing the hangover? – Whether we are dealing with more stress or more stomach problems from the extra alcohol and junk food, we are spending 11% more on non-prescription drugs.
Implications
Not surprisingly, the comforts we turn to during the pandemic aren’t always good for us — as sin spending rises. Half of women and a quarter of men say they’ve gained weight since March. For business, this confirms the stability of revenue streams in the “sin” categories. For individuals, this confirms the same advice your doctor gives you – moderate your intake of food and alcohol, don’t smoke, try to manage stress. Of course if we could solve how to motivate better health behavior, we could probably also solve how to motivate better financial behavior. Stay tuned…
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The small print
The spending data comes from the BEA. The spending increases are not adjusted for inflation, though inflation was very low during the last year so this doesn’t change the conclusions. “Fast food” is what the BEA defines as “limited service” restaurants, where you don’t sit down and get table service.