As most will know, this week marks the one-year anniversary of what has turned out to be a very long three weeks to flatten the curve. No area of the country – indeed, the world – has been spared from the substantial loss of life, personal freedom, and economic security which we have endured the past year and, as we sadly all know, it is not over quite yet.
Rather than looking back, we thought we would dust off our crystal ball and peer into the future. We admit that we needed to do some repairs on the ball which fell off its shelf several months ago. Gorilla glue is phenomenal, no? Except that having mended everything else I could find that seemed an appropriate glue recipient, half the tube remains and will be of no use when I next need it. This despite my overexuberance in applying glue to a few items which would have benefitted more from WD-40.
My trivial problems aside, including the prominent crack in said crystal ball – which is really just a Snow-Globe, we offer some observations and fearless and likely foolish predictions on random subjects….
Personal Services
A Bureau of Labor Statistics study published some years ago documented the shift in consumer spending from commodities to services – with services accounting for only 27.1% of expenditures to 1947 to over 60% in 2012 (“Explaining the 30-year shift in consumer expenditures from commodities to services, 1982-2012”, Monthly Labor Review, April 2014). While part of this is explainable by massive productivity improvements in goods production over the years, it is also due to an increasing reliance on personal services.
Over the past few decades, personal services have exploded. Nail salons are almost as ubiquitous as coffee shops. Every neighborhood shopping center seems to have a massage and spa salon. With most personal services closed for many months, many have discovered that they can skip the weekly massage or bi-weekly mani-pedi. Pampering will be back, but we expect at a diminished level. The result? Expect fewer nail salons that are busier, and a slowdown in the expansion of the personal services sector in general.
Restaurants and Cooking at Home
While part of a longer trend, the share of food expenditures eaten in restaurants has been increasing over time – from 39% in 2012 to 43% in 2019 (BLS, Consumer Expenditure Survey). But with restaurants shuttered, many have discovered the joys, health benefits, and cost savings of cooking for themselves. The pandemic has also seen a boom in grocery delivery and home meal kit subscriptions. After the initial euphoria of eating in a restaurant diminishes, we think that the trend will be towards less restaurant dining and perhaps even a resurgence of cooking in the home.
Shopping Malls
The shopping mall is suffering, being already mortally wounded by changes in shopping habits, or so it would seem. However, we believe that there will be a resurgence of old-school shopping malls as a social destination and, incredibly, for shopping. There is a certain joy in running through a rack of shirts looking for just the right one that is not satisfied by scrolling on a mobile phone. While internet purchasing will certainly not disappear, the demise of the shopping mall is, as Mark Twain famously quipped, premature.
No doubt we could offer up some additional forecasts which we would later deny saying, but we are curious about the perceptions of our readers, and hope that we can get a discussion moving. If you didn’t shatter your crystal ball or buy it at the dollar store, we’d love to hear from you!
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