Dishwashers Beat Clothes as U.S. Moms Use Hand-Me-Downs

[Purveyor]

By Matt Townsend and Cotten Timberlake - Aug 23, 2013

Shannon Burke is typical of many American shoppers these days. She’s pouring money into her home and cutting back on everything else.

“If we don’t need it, we don’t buy it,” said Burke, a 33-year-old mother from Abington, Massachusetts, whose two kids are mostly making do with hand-me-downs. “The money can be spent on our home. The more valuable our home is, the better it is for us in the long run.”

That’s great news for companies such as Lowe’s Cos. (LOW) and Home Depot (HD) Inc. Both reported blowout second quarters as millions of Americans, drawing confidence from a recovering housing market, loaded up on dishwashers, bathtubs and wall tile. It’s not so good for retailers selling clothes and other general merchandise. In recent weeks, chains from Wal-Mart Stores Inc. (WMT) to Nordstrom Inc. to Macy’s Inc. (M) missed sales estimates and cut forecasts.

Several blamed the results on consumers struggling with higher payroll taxes and an uncertain economy. While those headwinds are weighing on spending, especially for low-income shoppers, many consumers are simply buying elsewhere. Having already updated their wardrobes, they’re eager to replace aging appliances and cars after postponing such purchases for years. Ford Motor Co. (F) and General Motors Co. are benefiting from the best auto sales in the U.S. since 2007.

It’s not as though Americans suddenly have more money, said Poonam Goyal, a Bloomberg Industries analyst. It’s that they’re spending on things they deem a good investment.

more...

http://www.bloomberg.com/news/2013-08-23/dishwashers-beat-clothes-as-u-s-moms-use-hand-me-downs.html

[clarice]

1. Makes sense. nt

[Arctic Dave]

2. Niether is really a "good investment".

Both are discretionary spending. In five months you can't pay for your home, what does it matter if you put in a new dishwasher or tile.

Paying down your debt is your best "investment".

[Aerows]

3. It probably seems discretionary

if you aren't the one washing the dishes by hand because your dishwasher is broken LOL.

[Arctic Dave]

4. LOL

point taken.

[CreekDog]

5. dishwashers are usually more efficient than washing by hand

provided one doesn't wash the dishes before putting them in the dishwasher, which on new dishwashers with built in garbage disposals, shouldn't be necessary.

[Arctic Dave]

6. True. Depending on usage and whatnot.

But, I still wouldn't put them in the "investment" category.

[MindPilot]

12. yeah, but that new dishwasher will sell that house I can't pay for

much faster than a nice pair of jeans.

[Arctic Dave]

19. LOL

The bank will thank you when they repossess it.

[kentauros]

7. I wonder if it also stems from the fact that

you can get a Home-Improvement loan, but you can't get a Daily Life Needs loan.

[JVS]

8. Saw another article about car sales increasing as clothes declined. They don't seem to explain it.

In my economics courses cars and appliances were called big ticket items and watching their sales was considered a good indicator of consumer confidence. People who feel good about their economic futures feel comfortable buying expensive items while people who are uncertain will cut spending. Big ticket items are particularly sensitive to uncertainty because most of the time it is fairly easy for consumers to delay a purchase or do without. You can wash dishes by hand if you need to save money, most people don't wait until a fridge or washing machine is absolutely inoperable to buy a new one, a dryer that's crapping out can be supplemented with a clothesline, a car can be driven for a bit longer, etc.

There is a big catch here though. Skimping on big ticket items can only go on for so long. Eventually you need the fridge, you're better off owning washer and dryer than using a coin-operated machine, you need a reliable vehicle, etc. And my professor said that even in times that are by no means booms there will be uptics in the demand for these appliances when it gets to the point that they can't keep making due with the old. This is why it's good to look at other sectors, like clothing to see if people are scrimping elsewhere.

[Hassin Bin Sober]

10. I think Krugman touched on that recently.

The gist was sooner or later something has to give after cars and appliances wear out.

[eilen]

17. Well, there are not as many used cars out there

like there used to be. Many people buy new cars for better gas mileage. I wonder if they broke down the numbers on what kind of vehicles are selling.

I have been gimping about with my washing machine that needs a new clutch. I'm trying to get as much out of it as I can. I jump start the spin cycle with every load. I just don't want to buy a new one.

Also, my Macbook died. I also have a Mac Mini that is slower than molasses and I almost nearly threw it out the window. I ended up replacing my macbook with a Google Chromebook and I have an old (about 6 years old) PC in my basement I use instead of the mini when I can. My dh asked me if I wanted to replace the computers with something more current and maybe get a new laptop but seriously, I'm doing ok with what I have so far. I just don't wish to buy anything Apple now even though I used to just love them. Their business practices rub me the wrong way, between the labor practices and the tax evasion, I don't want to reward poor corporate citizenship and exploitation. I know that other electronics manufacturers do the same thing so that keeps my from buying anything else. In regard to clothing.. same thing. I am sewing a dress to go to a funeral instead of buying one. I want something new (usually just buy at the thrift store) so I'm making one.

What I have purchased: ebooks, regular books, sewing patterns, fabric, music, movies, food. I ordered a part for my Cuisinart and it didn't work. That design is very poor (the plastic piece that compresses the rod in the bowl that allows the motor to run so from now on I'm using a box grater.

Oh, and I sent ds to Nashville on Greyhound rather than Delta this summer. Saved lots of money and he didn't have to get felt up or x-rayed.

[Silent3]

9. I read one article about donating old clothes that said we're drowning in old clothes...

...and that many donated items will end up being ground into rags, or just thrown away. There's such a glut of excess clothing that (apparently, according to this article at least) even people in third world countries can be fairly picky about what they'll take from the mountains of old clothes that arrive as donations.

I spent nearly a thousand bucks on two new men's suits about a year and a half ago, just before losing way more weight that can be adjusted for (85 lbs). Those fairly nice suits, worn one time each, apparently have very little value as donations. I'll still donate them when I get around to it, but for all they cost, they might just end up being shredded into rags, or tossed into a dumpster.

My guess from all of this is that buying fewer clothes, even if it's sadly the result of economic hardship, is a reasonable shift in spending priorities, one that I'd hope would persist even after economic improvement.

[frylock]

11. you might do some research to see if any orgs in your area provide dress clothes..

to low-income folks interviewing for jobs rather than taking your suits down to the Amvets.

http://www.careergear.org/get-involved/donate-clothing/

[Purveyor]

13. You might want to consider donating those suits to your local state employment office. Ours happily

except business attire to loan to people going out on job interviews who haven't the means to go out and purchase clothes.

I donated 3 suits with shirts a couple of years ago and know they went for a good cause.

[renate]

14. our local homeless shelter accepts clothes

Some are donated from there to St. Vincent de Paul, but I would think that the good stuff like those suits would be great for their clients.

I'm just about 100% sure that wherever you donate them, suits like those won't end up shredded. Especially if you donate them to a place that helps people find employment, they'll probably end up helping somebody get a new job. So, good for you!

[MindPilot]

15. I'm sitting on the cusp of a new kitchen

Yeah, I'm going to have to borrow to do it, but my god-only-knows-how-old oven has finally quit, my fridge and washer/dryer are over 20 years old, and just last month the water heater burst. The cabinets are literally falling apart, and the 80-year old plumbing and electrical, that speaks for itself.

This is not really discretionary spending and Zillow says my house is appreciating at roughly $10,000 a month; hell yes I'll spend it on the house.

[eilen]

18. We are waiting.

Our mortgage has a few years left on it. Once the kid is through college, the cars will be paid off, the mortgage paid, we plan to borrow against the house for a new roof, gutters, driveway, chimney/masonry, deck/hot tub room, hardscaping and kitchen. I want to squeeze in a bathroom remodel, laundry room and laundry chute (since everything else will be torn apart and bloody mess). We figure we won't want to move once that is all done.

Of course, in order to avoid being home while the work is being done--and to pay for it all, I'll be working 12 hour straight shifts....

Meanwhile, I'm having fun with Pinterest, A Pattern Language, and Permaculture websites planning it all.

[Safetykitten]

16. I think, and this is my little theory, that spending for us barely making it is

now group/mass buys. Before, you could spend some money over the year evenly spaced, but now things are run till they drop. Dishwashers, washers...stuff like that. I saw it where I had my fabulous retail gig, and they would tell me they just had to buy as it could not limp along any more. The stores like HD and Lowes are becoming perfect in timing windows for customers.

There is no real recovery. Just smoke and mirrors.