We discussed this topic in detail yesterday and many of you had some great comments, in regards to where the discretionary spending has gone.
My favorite is yoga pants, clearly an albatross in the retail space, especially for makers of jeans.
My post was especially prescient, as the balance of the retail sector is being annihilated today, off the faces of stark warnings out of FOSL and M.
BEHOLD the carnage.
I was thinking about where my spending has gone up over the past decade, in an effort to try to justify this dislocation.
Here are some brief personal spending notes.
-everyone in family now owns an iPhone. Monthly cost $350.
-health insurance has risen from $1,200 to $1,700 per mo
-organic food costs have risen. Monthly grocery bill is around $3k.
-I collect stuff now (books, newspapers, vinyl records). Monthly expense of around $250.
-cable bill has risen, presently around $300 per mo
-Netflix: $7.99
-iTunes expense for family of 5: $75 per mo
-cars are more expensive. Monthly cost around $1,500
-son is in college. Annual cost, after scholarships, is around $5k.
-I frequent SBUX more. Monthly expense is around $250.
-Utilities are more expensive.
-Primary place to buy gifts and random stuff is now Amazon.
Truth be told, my income is higher than it was 10 years ago and I definitely spend less at the mall. I wouldn’t consider myself a ‘dead consumer’, but one whose spending habits have migrated, evolved, and have changed to custom fit my decadent lifestyle.
The mall is dead. There’s even a website dedicated to it.
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The Dixie Square Mall in beautiful Harvey IL. is in the Hall of Dead Mall Shame. Where they filmed the Blues Brothers movie. Since torn down. I could send a snap of the empty lot if anybody is interested.
Dr Fly,
How much is Eihorn down right now after this Macys fiasco?
He own KORS too.
I’m guessing he’s down $35 mill today
How do you spend $3k / month on groceries? For me and the wife, we maybe spend $500 / month on groceries and another $500 / month on private club meals. So it’s not like we are being frugal with food spending.
We have a family of 4, both kids under 6 (although eat like grown men at times)…I don’t have it in front of me, but I’d guess we spend $1,500-$2,000 on groceries – and that’s with me generally eating pizza/fast food not included in that total.
We buy organic everything for the kids – fruits, veggies, meats, condiments, etc. My wife eats mostly salad, so our bill is further reduced.
I don’t think $3k is much of a stretch for a family of 5.
We don’t have kids yet so I’m sure our bill will jump. At the same time, we will be eating at the club or out a lot less. I still think $3k is insane.
I bet you throw away a lot of food.
Fryguy, you must not eat organic. Regular food is often full of additives, preservatives, pesticides and carcinogenic additives. Most people eat that stuff anyway. But if you choose not to, because you want and can afford good health practices for your family, you pay a large cost.
We don’t throw away any food…literally. My wife eats whatever parts of the food our kids don’t eat and then just eats less when it’s time for her portion. So we are as efficient as you can be from that perspective.
Organic, natural, etc. is expense…end of story.
3k is easy on a non gluttonous budget. I swear to you, I do not splurge. That’s the cost.
That is what I am wondering, why the fuck are you not going to CostCo?
I spend about $ 1,500 a month for in groceries for two, and she buys her own lunch most days. Excluding non-edible items like paper towels and laundry detergent, I favor Whole Foods. Food is my only extravagance. As long as I can afford it, I plan to eat food I believe is relatively healthy. After all…I’m eating it.
whole
foods
I didn’t partake in yesterday’s mall commentary, but agree with most of it. As somebody who’s basically had rising income every year for the last 15 years, I can say that my spending habits have remained relatively constant, perhaps slightly declined (ex food and healthcare, which have never stopped rising).
Maybe I’m just getting old, but I’ve only been to an actual mall maybe twice in the last 10 years…both times needing new suits, usually from Brooks or Nordstrom – which incidentally are mostly useless since every company I’ve worked for over the time has shifted to either business casual or fully casual (these are real, Fortune 500 places).
Who wants to deal with the mall – finding parking in a far-away spot, walking around like a gerbil to look at the same junk surrounding by different colored walls, having to figure out the meaningless and arbitrary price points, dealing with moronic people (sales people and the regulars walking around). There’s literally nothing about the mall that’s enjoyable.
Also, a few years back my wife bought me a dress shirt from Costco – I laughed at her, as if I would wear a dress shirt from Costco. Then I tried it on – sure, it’s not made out of fine Egyptian cotton, but it was very comfortable, fit better than most high-end brands, looked professional…I only have the one (still wear it), but I would imagine many folks have opted to go for the $15 dress shirt vs. any overpriced version from mall stores.
HA! I have jeans from Costco and always get complements on them; people are stunned with I tell them I paid $30 at Costco. Super comfortable too.
My lawyer friends says those costco dress shirts are the same shirts as some high end brand (can’t remember) just distributed by costco with the Kirkland name on it… I get bulk food there and a lot of the food is like that too.
You haven’t eve added in the extracurricular activities the kids are in. That adds up quickly.
Truly. I though we’d feel flush again once our last kid was out of preschool and all the children were in public schools (which do constant fundraising so they can have extravagances like art, PE, music, and science).
If you have a kid in recreational sports, with parent coaching, your registration fee is subsidizing the elite travel teams. If you want a professional coach, $$. The leagues and big clubs have most of the field space rented, so there aren’t any good alternatives. The only option, if you want to cut spending, is to cut some sports entirely.
If my kids want to be musicians, they will be getting a late start on it. No room in the budget or schedule.
If we’ve reached the age of ‘peak junk’ while rents are at an all time high maybe it is time to buy storage units.
I beleive that trade has passed. Storage spiked when houses crashed as people were forced to dowsize from large houses to samlelr apartments when they couldn’t pay their bills.
Also, comparing Baby Boomer spending habits with everybody else, I think theri stuff will end up in the trash, because their kids won’t want it. Maybe a long-term (10 year) play is junk removal services and estate auctions services. Maybe eBay, too.
I went to CostCo yesterday and got one of their packaged salads for lunch which included all organic lettuce, dressing, crutons you know all of that shit and also a sandwich. It cost all of $6 and was huge. Assuming you do this 3 times a day and 30 times a month you are only looking at $2100 for 4 people and that is a huge meal even for one person.
I go to the butcher for all my meat, super fresh. Weekly trip is about $60-$70 for a huge amount (even at an average of $6 a pound, that’s over 10 pounds of meat!). We get produce at the local Treasure Island. For $60-$70 a week I can buy a fucking full cart of produce. I don’t eat processed garbage anymore. So all in, that’s about $500/month.
I spent $1,000 on grocery for a family of four and another $1,000 per month for play. I personally don’t shop at Whole Foods. Maybe that’s the difference. As a family, my wife only buys high quality stuff.
In California and Nevada, the outdoor malls seem to be doing fine, while the indoor malls are on the brink. Additionally, it visually appears the best performing malls in these markets are both the high-end luxe types and the discount outlets.
TJ Maxx is busy. Crate & Barrel is busy. Macy’s is dead.
Personally, the only thing I ever bought from the mall is clothing. I now buy most of my dress clothing online (free returns). About half my casual clothing comes from the discounters (Marshalls, TJ Maxx).
And a large percentage of my casual wear consists of tees or polos from experiences: concerts, breweries, wineries, golf tournaments, etc. There’s that word again: experiences. I’d much rather drop a Grand on a weekend in Tahoe than on some fucking soon-to-be-obsolete television.
First comment on iBank but felt compelled to add some commentary from a 31 y/o who isn’t rich. Live in southern California, all my friends are married, some with kids…pretty much the demographic you want spending money at malls but we aren’t. Like resumark said, our discretionary income goes to experiences. Add in the fact that my wife buys a ton of stuff on amazon instead of wasting time going to the mall after work its not a surprise malls are dead. Don’t forget about the monthly online services like Blue Apron(food)/Birch Box(beauty products)/Trunk Club (clothing) arnt helping malls either.
There is no point to buy bs suits at stores anymore. If I want to buy a suit, I would book a $750 round trip ticket to Vietnam and have my suit tailored by a pro for $100 while enjoying my 2-3 wk vacation dirt cheap. I’m also part of the Millennial Generation.
What would it take to bring us back to the malls? I’m not sure anything could do that for me.
Regular food is often full of additives, preservatives, pesticides and carcinogenic coloring and flavorings. Most people eat that stuff anyway. But if you choose not to, because you want and can afford good health measures for your family, you pay a large cost.
You pay like 50% more than your normal budget for regular food. It’s hardly a huge cost.
Well, as a percentage of your food budget it is large.
In fact it’s large enough that most people who could easily afford to pay it, do not choose to.
I was at a local clinic once and mentioned how outrageously expensive our local hospital is, compared to others in the country and state, and said I would get my lab tests done elsewhere.
The nurse said “Everything is expensive here.” And started complaining about the cost of the food at the local organic food store. Now she’s a nurse, not a hedge fund manager. But her husband works too, I expect. I am sure that she could afford to shop at the local organic food store easily. Still, she complained, that she would like to shop there but “can’t afford it.”
Dr. Fly,
A side note to the subject of retail: do you have a favorite Chino/Khaki’s brand? I’ve recently ordered some of Bill’s Khakis and a pair from Orvis in search of the ultimate qulaity pair. Please let me know if anyone has a favorite……must be of the highest quality.
I like banana republic khakis.
I order shirts online via Charles Tyrwhitt
Brooks Bros are most comfortable for me.
I buy my Khakis at Costco. There is usually a healthy selection of brands in spring as well as the Kirkland-branded ones. I used to buy at The Gap or Banana Republic for 3x the price.
So wtf with SPG? They are the malls.
$100. a day for food? For 5 (?) people? The profits at Whole Food must be through the roof, because that is an insanely high food bill.
Food is important to us and we never stint, and our bill is a third of that. (4 adults) Humanely raised meat, lots of fresh local (Pacific) seafood, multiple veggie servings per meal.
8k a month before housing and utilities. This is an eye-opener and gives some insight on what it takes to service a middle class lifestyle these days.
A lot of Americans aren’t smart with their money in which they fail to squeeze the most bang for their bucks. I make $18,000/month from my normal job and I certainly don’t spend $100/day for food. I spend $100/day on food if you include at home breakfast and lunch, and a family dinner at a restaurant.
For a guy like me, I rarely go to Whole Foods for grocery. I go to Safeway and Freddie Meyer for my grocery. I also go to Costco and Winco when we want to buy things in bulks. All the ingredients at our home are organic.
healthy food is expensive, but not sure how I can get to $3k for groceries.
If you price out the ingredients for a good garden salad, it’s probably more expensive than a steak.
Going out for food has surpassed shopping at grocery store.
http://www.bloomberg.com/news/articles/2015-04-14/americans-spending-on-dining-out-just-overtook-grocery-sales-for-the-first-time-ever
the mall is dead because the traditional mall is not a fun place to go to anymore. I think it’s fair to say that for most job demands are greater now than they were 10-20 years ago. (They have to because our bosses have trimmed the workforce while expecting same or better productivity). That leaves us with less free time. So why waste it driving out to some large indoor structure, deal with parking, and go inside to a store where there are no sales associates around, and the price is higher than just ordering online at home.
As an example, we buy the kids these packages of dried fruit…it’s totally organic with no additives or preservatives. It’s $3-4 a package and the kids pretty much eat a whole pack in a sitting. If they do that once a day, that’s $25/week, or $100/month…for one snack – no single snack fills kids up…and sometimes they both have one.
I know the organic ground turkey is something like $15 for 3 pounds, which we go through a bunch. Organic milk is $6/gallon, figure at least one a week.
It doesn’t take long to get up there.
Congrats to your spawn, Doctor. Over the years you have shared a few details – i hope he is enjoying both college life and learning something he enjoys.
Crude futures appear mighty persistent in the face of global deflation. Only thing I can figure is that the market anticipates supply disruption this summer. For example, it is not difficult to imagine chaotic revolution in Venezuela.
Check it out the USDA says the average US male spends $69.80 a week on food?
http://www.cnpp.usda.gov/sites/default/files/CostofFoodMar2016_0.pdf
Here’s a TIP on iTunes…get a monthly Apple Music account for the family for $15/month. It allows up to six people to stream music on the one account. Save $60/month.
The problem with malls is they have become soul-less. They all have the same national chain stores, boring professional graphics, bullshit hype signage, and disinterested staff pretending to care. The giant parking lots destroy the neighbourhood and the blank walls ruin any street appeal.
The life has been bled out of the mall shopping experience.
However, get outside and walk down any decent shopping street, and there will be a real mixture of unique stores, filled with real people. Its life being lived.
I somewhat agree. Unfortunately the once-independent shopping streets are becoming bland as well. For instance, downtown Santa Barbara now looks like downtown Los Gatos which looks like downtown San Luis Obispo which looks like downtown Palo Alto. They’ve all fallen victim to the higher-end homogeneity of Fast Casual food offerings, Pottery Barrel Restoration Barn Crate Hardware, and Apple stores.