It's not surprising that people seem to be cutting back on the unnecessary costs of discretionary purchases during the economic recession. Restaurants are losing customers, electronic stores are closing, and even the pornography industry seems to be going soft; however, some notable exceptions -- from candy to Spam to condoms -- have managed to avoid the economic downturn and actually turn a profit.
A recent article published by The New York Times pointed to the rise in demand of candy. Though the reasons for this phenomenon are unclear, the low cost of candy coupled with the feel-good effects of sugar on the body may answer some of these questions.
The numbers confirm what can be seen at the bustling kiosks: Nestle's profits rose by 10.9 percent in 2008, while Cadbury's catapulted a whopping 30 percent. The same reasoning that has driven decades of alcohol and cigarette sales may help to explain why candy is faring so well in this economic climate -- it is a comfort good.
But with the middle-class sector being particularly hard-hit by the recession, and with cigarette sales sagging due to tax hikes, candy is emerging as a resilient product capable of satisfying penny-pinching families.
While bad news pours down every day, people may be seeking out shelter in the products that please them. Dorie Clark, CEO of Clark Strategic Communications and lecturer at Tufts' Experimental College, explained that one reason that Starbucks Coffee has been so successful is that people can indulge without having to spend big bucks.
"They position themselves as an affordable luxury," Clark said of Starbucks. "Most people cannot afford a week in Tuscany or a fancy spa, but everybody can afford [to spend] three dollars on a latte."
Freshman Jazmon Prenatt agreed that cutting back on extraneous spending does not mean cutting back on his coffee habits. "One thing that I wouldn't stop spending money on is coffee," Prenatt said. Caffeine intake, however, may be more of a perceived necessity for college students than a discretionary indulgence given the frequent need to stay up all night cramming for midterms or expounding on important essays due the next day.
Much like coffee, alcohol is another commodity that students may not be willing to give up.
"No matter what, people are going to buy [alcohol] -- this is college; but they might think twice before hosting a party without getting money from everyone who comes," junior Claire Oppenheim said.
Steve McCloud, a manager at Downtown Wine and Spirits, said that he hasn't seen alcohol sales go down -- but quality of purchases may have.
"I would say the biggest trend is that instead of buying $20 or $30 bottles of wine, people look for more $10 and $12 wine bottles ... People are looking to get the most for their money, most bang for their buck," McCloud said. "Kegs are not as noticeable; people will buy the beer they want."
In times of financial hardship, the first instinct for many families and frugal students alike may be to stay close to home, reducing expensive outings to a minimum.
Several restaurants in Boston extended their Restaurant Week promotional deals for an additional week this year, reflecting the incentives businesses have had to use to lure more people out of their homes.
This reasoning may explain why Spam, an inexpensive canned meat product, has been so explosively successful in recent months. Hormel Foods Corporation employees are being forced to work double shifts to keep up with the demand. More than recession-proof, Spam seems to be thriving especially well in uncertain economic times.
Hibernating couples are also turning to one time-proven stress relief technique: sex. Condom sales increased by five percent at the end of 2008 and six percent in January 2009 in relation to the prior year, a USA Today article noted.
Other forms of stay-at-home entertainment include movie rentals and video game purchases. Netflix, the online movie rental service which mails DVDs to subscribers' homes for relatively low prices, has been faring well. For parents reluctant to spend $50 or more on a family outing to the movies, Netflix arises as a low-priced alternative. The video game industry is also performing remarkably well regardless of high prices for newly released and heavily sought-after video games. According to the Associated Press, revenue from video game hardware rose by approximately 11 percent in February.
On the other hand, pornography, which was one of the industries commonly thought to be recession-proof, is now having difficulty keeping up with the revenues of past years. With DVD prices ranging from $30 to $40, and the competition of millions of Web sites with free pornography, the industry is struggling to find ways to maintain customers.
Emily Maretsky contributed reporting to this article.
