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Melissa Preddy

Veteran financial writer Melissa Preddy served as a business writer, editor and columnist for The Detroit News from 1995 to 2008, is a Michigan-based freelance journalist. She now works as a writer and editor for a medical research unit of the University of Michigan Medical School. Follow her daily posts. | E-mail: Melissa Preddy

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FDIC report helps you make local sense of record bank profits

A recently released report from the FDIC on quarterly U.S. bank performance contains the nuggets for a variety of stories that reflect your local area’s economy.

As Reuters reports, banks earned more than $40 billion in the second quarter of 2014, according to the Federal Deposit Insurance Corporation’s Quarterly Banking Profile. 

citibank branch in the rain

Screenshot of AP video from HuffPost Live

Financial institutions are setting aside less money to cover bad loans, Reuters says — presumably a sign that borrowers are less likely to default than just about any time since 2006, according to the loss-reserve data.  Bloomberg also reported on the results, noting that those near-record profits are owed in part to the hottest lending environment since before the recession. (Although it is worth noting that according to the ABA Banking Journal, loss reserves for commercial loans – vs. commercial and residential real-estate loans — are actually up.  What does that portend?  Again, fodder for questions for local banking officials.  Is this trend reflected in your market?)

FDIC reports at state level

So, as we head into the home stretch of 2014 and the end of Q3, the time is ripe for a sit-down with some of your region’s banking executives.  Use the FDIC report as a springboard to talk about how your area echoes or bucks national trends, any big or noteworthy deals they’ll disclose, the creditworthiness of borrowers,  small business trends they’ve observed and competition for borrowers. 

The FDIC reports are available at the state level; go to this page and select your state from the drop-down menu; note that you also can run the state report for the  same quarter in 2013 and 2012 for comparative purposes.  You might want to enlist a commercial accountant, bank industry analyst or other pro to help you parse the financial statements, but some year-over-year stats are obvious and great fodder for those executive interviews.  Running the Michigan reports, for example, I see that the number of banks is down by several, employment in the banks reporting to the FDIC is down by several thousand jobs in just a couple of years and that “non-performing assets’ (past-due loans) are down quite a bit. 

I think more than any specific bank’s financials, however, readers and viewers would like to know what this means for them.  Are construction loans up and likely to ripple out through the community with jobs?  Any new developments coming in, or small businesses expanding?  What do these metrics translate into (if anything) relative to momentum, growth and recovery in the local market.

Banking on jobs

And speaking of jobs, I had a very interesting chance conversation with a tradesman servicing my house.  He mentioned that his wife was one of many long-time employees being let go by JPMorgan Chase, which did project 8,000 layoffs earlier this year.   In addition to the worker’s plight — according to this conversation, she, a 25-year employee of the company, was offered a modest buyout package or the chance to take a job at a $20,000-per-year pay cut — the inside view of the situation offered some insight into the new bank branch paradigm.  Again, this is hearsay but if I were on the beat I’d be hotfooting it to some regional bank offices to inquire:  Assistant managers are being eradicated and tellers trained to do some management tasks while working as tellers at peak times of day, and lobby kiosks are being installed to reduce the workload of human bank employees.  

Clearly, banks at record profit levels still see the value in reducing full-time positions and relying instead on a more flexible and lower-paid workforce — a lament of the post-recovery job scene common in today’s business coverage.  Ask all local banks and credit unions about their staffing models today, next year and so on compared to a couple of years ago, and what their rational is for cutting jobs when profits are soaring. 


As large-market casinos fold ‘em, how are local casinos holding up?

When the first slot machines hit Michigan a couple of decades ago in a small tribal casino, the notion of spinning the wheels was enough of an unheard-of novelty that my mother and I drove two and a half  hours to the central part of the state, for the pleasure of pumping our dimes and quarters into the slots in a small, crowded, smoky hall with a no-frills motel about a mile down the road.

Now, fast-forward 20-odd years and the United States sports so many gambling venues that for many consumers they’re a routine neighborhood attraction rather than a destination venue.  And the proliferation of gambling opportunities means the casinos each are getting a slimmer piece of the pie, leading to problems in an apparently over-saturated industry.

For example, as of this month, three major casinos in Atlantic City will  have  shut down their gambling operations and hotels this summer alone, eliminating the jobs of thousands of workers.  That follows the June closure of the Harrah’s casino and hotel in Tunica, Miss., another major U.S. gambling cluster.

The crumbling of Atlantic City is a pretty good news peg for taking a look at your market’s casino operations.  (And if their aren’t any, how about a look at what level of casino tourism your area’s consumers generate for nearby markets?)  For the most part it seems that Americans still are spending heftily on gambling but the pattern of the getaway week or weekend  has given way to shorter drop-ins at the local hall.

Huge Atlantic City Casino Closes Down NPR

Revel Hotel Casino in Atlantic City, N.J. has closed a little over two years after opening.

The University of Nevada at Las Vegas has a Center for Gaming Research that might also be a helpful source of stats and data.  And of course the industry trade group, the American Gaming Association, offers a lot of stats including its State of the State report which gives numbers for individual markets.  If you are including tribal casinos in  your report — more difficult because of less transparent reporting requirements — try IndianGaming.com and this organization, Casino City Press – ask if they’ll share their market research reports free of charge with journalists.

Beyond the casino companies themselves, you can look at the economic impact of gambling in your community.  It s a huge topic that is fraught with different special-interests and views, of course.  The topic isn’t as hot as it was 10 years ago during the proliferation but you might check with your region’s federal reserve bank for any studies and commentary; this 2003 report from the St. Louis Fed might help in understanding some of the issues and metrics to evaluate.  Be sure to track down suppliers from food distributors to construction and cleaning firms about the effect on them of waxing and waning casino attendance.  Many are required to be licensed by the state gaming commission so check for lists of vendors there.

One thing I would recommend for anyone on the casino, real estate/economic development, personal finance or marketing beats: Sign up for the loyalty programs at all of your area’s gambling centers.  I am on the mailing list for several national ones such as the Caesar’s Entertainment Total Rewards program as well as a few for local standalone casino/hotels.  In a highly competitive market, return visits are the lifeblood of a casino.  Here’s a report on “The lowdown on casino loyalty programs” that shows some metrics about how they drive business for gambling parlors.  Here’s a 2010 paper from the University of San Francisco on the effectiveness of casino loyalty programs that makes some interesting differentiations about casino player segments (“Mr. High Roller” vs. “Happy-go-lucky,” for example) and  a blog post from the marketing association Loyalty360 about casino programs.  (Good blog to bookmark for a variety of beats, by the way.)

Tea leaves in casino marketing

The frequency of their direct-mail pitches and the interesting psychology behind the marketing ploys are quite interesting and dissecting them might form the basis for some interesting heads-up for readers.  Obviously, gambling fulfills (or not, for problem gamblers) some emotional needs as well as filling entertainment  hours, and deciphering the ways companies connect emotionally with consumers is fascinating.

For example, one chain with a casino near me is constantly sending “offers” for giveaways of items like coolers, camp chairs, small appliances or housewares like wine glasses and down comforters.  It’s pretty apparent they buy overstock or outlet items for pennies on the dollar and woo consumers with the bait of a “free” electric griddle or spa bathrobe that probably cost the casino $10 or $15.  Odds are the consumer will plop down and spend far more than that at a table or gambling machine, of course.  Other common lures include gift cards for name-brand gas stations, or even gift cards to big-box chains like Best Buy.  Special events like free-car drawings and raffles also are common to get people in the door.

If you don’t want to join the “players clubs” yourself or won’t gamble enough to keep yourself on their active mailing lists, it might be fascinating to enlist some regular patrons and ask them to save up their casino direct-mail pieces for a month, a quarter or even a year.  Of course, players who spend more get more — free concert tickets, private dinners, parking privileges and meal “comps,” etc. — and if you can find some brave consumers who will share their win/loss statements as well as their direct-mail advertising,  you could tote up each and show prospective gamblers what those “free” coolers, buffet dinners and the like are really costing them.  (And I have nothing against gambling but do think everyone should approach it with a realistic view of casino tactics.)

Might be interesting to check with area bankruptcy attorneys, CPAs, debt counselors, etc. to see if they are seeing more or fewer consumers with gambling-related problems.



Stock market records mean little to households with no access to market

Tim Horton's Burger King logos

Traders work on the floor of the New York Stock Exchange (NYSE) in February 2014.

Wall Street chalked up another milestone on Tuesday when the Standard and Poor’s 500 index closed above 2,000 points for the first time ever, buoyed by gains in durable goods orders and higher consumer confidence, as Reuters reports.

Those big round numbers are causing the usual buzz in the financial press — the Wall Street Journal says “The Bull Market’s Strength Is Reaching Epic Proportions,” and notes that “The S&P 500 has rallied 195% since March 2009, the fourth-best bull market since 1928 in terms of both duration and magnitude, according to Bespoke Investment Group.”

The sustained bull market is good news for investors, particularly those who stayed the course.  The Investment Company Institute, an industry trade group, recently issued a release with the catchy headline  “Accounts of Consistent 401(k) Participants Grew 6.8 Percent Annually During the Five Years That Included Financial Crisis.”   People who did not liquidate investments, or tap them in hard times, and who continued to make contributions, now are reaping the benefit of following traditional buy-and-hold advice.  Read the full ICI report here. (PDF)

No doubt many investors are enjoying their quarterly statements more these days.  But one angle you might pursue is flip side of the coin:  Only about half of Americans are invested in the stock market, and many don’t have any practical way to be invested.   Which may explain why the roaring bull market is making so little noise on Main Street:  Gallup just reported that “U.S. Investors Seem Unaware of Bull Market’s Strong Gains,” noting that its polls found low awareness and low optimism about a market which actually is in one of its brightest stretches of the past 85 years.  The market apparently is out of reach of a huge segment of Americans, who already are woefully behind in savings — some 36 percent lack any sort of retirement account, according to this L.A. Times report based on a new Bankrate.com study.

With one of this year’s recurrent stories the low wages and low quality of most newly created jobs, why not talk with a cross-section of workers about what (if anything) these stock market headlines mean to them, and whether they see the stock market as a viable investment for them?  You also could talk with Certified Financial Planners about when and whether households on very limited budgets should invest in stocks, and provide a step-by-step primer on opening, say, a Roth IRA with automatic contributions. (Keeping in mind the monies funneled to a Roth need not necessarily be invested in stocks).

People in your audience who feel shut out of America’s financial markets may appreciate guidance in how to participate, or alternative ideas from the pros.  Sometimes, for example, the savings in tax liability can offset the first few percentage points of income they contribute to a plan, so their pocketbook won’t know the difference but the dollars will be headed to their own coffers rather than the Treasury Department’s.  I don’t think that’s reported widely enough, complete with the math, to refute the notions of those who feel they can’t afford to save.

Another angle is the gender gap in retirement savings:  This Wells Fargo survey says more men than women invest in 401(k) plans and at a greater rate.  Talk with consumers, employer sponsors of plans, financial counselors and advisers about why this is.  Here’s a Reuters story about women’s greater need for retirement security and problems in saving, too.

Another way to localize the S&P 500 milestone is to take a look at how index members in your neck of the woods have performed vis a vis the overall index and their peers.  It’s a decent reason to check in with local companies about their fourth-quarter and 2015 outlook, their take on the coming mid-term elections, sentiment about Fed policy and other economic issues.  Oddly I could not locate a list of S&P 500 members sortable by state, but this list in Wikipedia will serve as a starting point for you; a local brokerage firm probably can use its Bloomberg terminal to create a list for you, as well.


Burger King bid for coffee shops puts fast food evolution in the spotlight

Tim Horton's Burger King logos

A deal to acquire Tim Hortons would move the company’s headquarters to Canada.

Wall Street gobbled up shares of fast-food monarch Burger King on Monday, following word that the 60-year-old chain might be headquartering north following the acquisition of the Tim Horton’s coffee and doughnut shops.

Both chains enjoyed double-digit stock price hikes, with investors licking their chops over the favorable tax situation Burger King would enjoy as a Canadian company, as the Chicago Tribune reports.  (Here’s a primer on corporate tax inversion and why companies do it by Trib reporters; it’s been a buzzword all summer particularly in Chicago, where hometown drugstore company Walgreen’s recently floated the notion of moving itself overseas.)

It’s an interesting phenomenon and one that is interpreted as somewhat disloyal to American patrons — one senator already is calling for a Burger King boycott in favor of hometown favorites Wendy’s and White Castle — and the consumer reaction angle is one you might pursue quickly.  What do franchise owners hear from their patrons about the prospect of BK having it their way, and how are they handling any reaction from restaurant patrons?   Mashable says “Burger King may be in for a whopper of a backlash,” citing comments on social media, while the chain itself is trying to quash the image of itself as a tax dodger.

Good story but I wonder if the local fast-food joint has quite the emotional grip on patrons that it might have had several years or several decades ago.  A look at the evolution of quickie food service and the viability of hamburger chains might be an interesting response to the Burger King headlines.

Fast Casual vs. Just Fast Food

The Wall Street Journal just reported that consumers in their 20s and 30s favor chains like Chipotle over burger & fries fare; the WSJ said “the percentage of people age 19 to 21 in the U.S. who visited McDonald’s monthly has fallen by 12.9 percentage points since the beginning of 2011, according to Technomic, while the percentage of customers age 22 to 37 visiting monthly during that period has been flat. ”  A recent Forbes piece said that diners’ preference for “fast casual” places like Panera is taking a bite out of businesses on either side of the spectrum, from traditional fast-food on one hand to casual sit-down chains like Olive Garden on the other.   Why not head out and talk with store owners, managers and customers — and make your own assessment of who’s eating where, what they’re spending, and why?  I noted recently in a college town near me that an on-campus McDonald’s actually closed, while stores such as Potbelly and Five Guys have proliferated.  What happens to the investment of long-time franchise owners of stores like McDonald’s and Burger King when traffic wanes?

The U.S. Department of Agriculture offers a fascinating data set, the Food Environment Atlas (worth exploring when you have a moment for other ideas) and amid this treasure trove is a map of fast-food establishments, expenditures and more –  by county!  The data is from 2011 but it will certainly get you off to a good start and provide per-capita context for describing the fast-food scene in your market.  And there are comparative figures from 2007 to help you show trends.

Another facet of the issue: This Motley Fool article said increasing food offerings at convenience stores is cutting into traditional fast-food sales, as well.  And I’ve noticed a number of grocery stores touting their deli areas and fresh salad bars as convenient lunch or dinnertime fare; they’ve even moved things around to stock single-serve beverages near the deli.  This Frick’s Market, a rebuilt grocery store in rural Union, Mo., included a pleasant dining area in its recent re-design and its website offers lunch specials such as bratwurst & tater tots for $1.99 — and the company’s Facebook page touts “Simple Supper Solutions” available from the drive-up window at its deli.  Clearly, someone there saw an opportunity to compete with traditional fast food.  What are retailers and other food purveyors in your area doing?

As I often say, you likely can find an angle to this story even if you’re not on the retail, restaurant or Wall Street beat.  Think health care, technology, marketing and advertising, even agricultural sectors that supply the big burger chains — all will be feeling the ripple effect of changing consumer tastes.




Chronicle the changing nature of jobs for a fresh take on Labor Day

Riding on a motor boat

Photo by Christina Rutz

With Labor Day only a week away, you may be pondering ways to commemorate the holiday, which was first observed in September 1882 in New York City, according to an account on the U.S. Department of Labor website.

In the ensuing 132 years, the ebb and flow of the organized labor / collective bargaining movements has followed a fascinating trajectory, and a review of the current state of union representation is always interesting this time of year.

Here’s an interesting roundup of Gallup survey results regarding labor unions; note that last year only 8 percent of respondents said they’re a member of a union and most people surveyed expect labor unions to become weaker as time goes on.   And here’s a link to some Pew research about attitudes toward labor unions; it’s fascinating that despite the deteriorating quality of jobs in the United States, from stagnant wages to the “just in time” worker scheduling that prompted this recent New York Times article “Part time jobs, full time headaches,” that the American public continues to view unions in a mostly unfavorable light.

You might want to talk with labor experts, union officials, corporate management, consumers and workers in your area about the cause of the seeming disconnect, even as worker clout continues to wane.  Are there any local efforts underway to establish collective bargaining?  That’s an angle for any beat, from health care to casinos to office work.

Or you could pursue the part-time jobs angle, which is getting a big buzz lately – this column from Al Jazeera America points out that despite the wane in unemployment, “Since 2007 full-time jobs are actually down by 1.6 million, while part-time jobs have grown by 2.7 million.”  Can you find some local case studies/household situations where people are off the jobless rolls but in lower-quality positions than they previously held?  Or newly minted workers fresh out of high school and college, taking part-time jobs to eke by?

Here also is a U.S. Census Bureau “Facts for Features” reference page of factoids related to Labor Day, from union membership to prevalence of various occupations to wages.  Just about every item is a launching pad for a more in-depth story, from the male/female wage gap to Labor Day weekend travel to the fastest-growing job category: personal care aide.

Other Labor Day stories include, of course, travel & tourism, shopping & retail sales and even a look at the wind-up of summer road work projects and other efforts that have local economic impact.

However, my bid for the most interesting angle for Labor Day 2014 would be a look at the contingent workforce, whether long-term contractors, short-term temporary staffing, freelance service providers or any other cohort that works for 1099 pay instead of W-2 wages and benefits on the beats you cover.

This trends report from software maker Intuit predicts that contingent workers will comprise more than 40 percent of the workforce by 2020, with traditional pay-plus-benefits jobs increasingly harder to find.  (The entire report is chock full of story nuggets for future use, too; it’s worth a thorough read.)

Here’s an eye-opening report from the consulting firm Accenture that’s quite enthusiastic about “Creating a just-in-time workforce,”  and the benefits of such strategies, like using former workers as 1099 contractors.  (“Outperform the competition,” according to Accenture.  It would be interesting to ask the authors or their counterparts at other agencies about how they suggest workers cope with a perpetual short-term approach to jobs.

This report from staffing firm Snelling, Rise of the Contingent Workforce,” (PDF)  is helpful in defining some industry terms and jargon.

Check around with staffing firms about trends in long- and short-term contract work in your area, including the duration of assignments, wages and other conditions.  The Bureau of Labor Statistics doesn’t seem to have any fresh numbers but these “Contingent and Alternative Employment” tables from 2005 should help you formulate lines of inquiry to pursue now.

The following blog post (I’m not vouching for the blogger, whom I don’t know, but his points are worth noting) about a little-remarked-upon penalty to the freelance worker – self-employment taxes – is worth at least a sidebar.  That extra 7.5 percent right off the top of 1099 wages can come as a shock to people doing contingent work   You might want to ask  the IRS if it can parse out any changes over the past decade in reported 1099 vs. W-2 income for your state or region; I’m not finding any analyses online, surprisingly.  (If you do find the data, please share with us!)

Also, what are the implications of a growing class of 1099 workers when it comes to mortgage and auto lending, and other activities like renting that depend on proof of income?  How does it factor into child support arrangements – which of course ripple out economically through a community.  Here is a slightly dated CBS News report, “Temp work raises long-term questions for the economy,” about the shift in relationship between employer and employee.  The secure cradle-to-grave approach that characterized the mid-20th-century relationship between company and worker may have born some relationship to a peak in prosperity; could the current hand-to-mouth nature of participating in the workforce be prolonging economic malaise?  It’s worth asking some of the players and decision makers what they foresee in coming decades.


Ongoing Ferguson strife highlights economic, business concerns elsewhere

A man protects this storefront with reinforced plywood. Photo: The New York Times

The ongoing civil unrest in Ferguson, Mo., sparked by the police shooting of teenager Michael Brown, seems a bit of a stretch as a premise for business coverage.

But with no end in sight to the confrontations and headlines – especially in light of another shooting on Tuesday in the St. Louis area – and involvement by the U.S. Department of Justice and comments by President Obama, it might behoove financial writers everywhere to address some tangential storylines.

Clearly the root issues behind the strife in Missouri – from race to income/wealth inequality to the militarization of community police forces — are some of the most profound of our time and I’m not suggesting they are fodder for frivolous business features.  But realistically the nature of some of the violence does raise questions among consumers, small businesspersons and corporate entities about how they would fare under similar circumstances.

For example, images of damaged and looted stores must raise questions among merchants in your audience about their own liability; you might want to emulate this St. Louis Business Journal piece, “Most business insurance covers riots,” and offer a primer on what’s covered, and what’s not, in residential and commercial hazard policies.  Also talk with sellers of insurance in your neck of the woods; what are they hearing from the financial institutions whose products they represent in terms of guidance?

“Images of damaged and looted
stores must raise questions
among merchants in your
audience about their
own liability.”

One trade publication already is out with a piece called “The riots in Ferguson: What agents need to know,” and I would not be surprised if insurance offices in locales far from Missouri are getting inquiries from small-business clients looking for a checkup on the limits and terms of their current policies.

In addition to after-the-fact coverage, you could look into demand for preventatives such as security systems.  Vandalism is a fear of business owners everywhere – it’s the second-ranked concern voiced by owners  in a recent survey commissioned by security service firm ADT.

And, as always after events that involve fear and adversarial relationships, “gun sales are soaring.”  What are gun and ammunition sellers in your area seeing in response to civil unrest that comes amid a somber period of global political and military strife, including a highly partisan upcoming U.S. election season.  Another way events like those in Ferguson can ripple out beyond geographic borders is via securities markets.

Here’s a fresh opinion piece from MarketWatch.com about “Why Ferguson should matter to investors,” and appears to make points about the economic, social and community ramifications when large local employers (in the case of Ferguson, TWA and Anheuser-Busch) go out of business or are whisked away by mergers – leaving behind places like dollar stores and fast-food joints where the job opportunities will never promise the upward mobility of the long-gone manufacturing, transportation and other employers.

The above notion might be an opportunity for you to take a look at the economic fallout from the departure of any large employers from your region; how are the former employees faring and how has the loss of such jobs rippled out through the community in terms of poverty, crime, migration, the ability of residents to support vibrant small businesses, and so on.   Here’s a University of California-Davis pimer, “Finding Poverty Statistics,” that might help you find the historical data you’ll need for context on such a story.


Tackle a fantasy football story on any business beat

Guys drawing players for fantasy football teams

A foam hat and a Bud Light help get this fan in the spirit during the fantasy football draft. Photo: dabruins07 on Flickr

With both professional football and college football about to kick off their 2014 seasons, the myriad  businesses that depend on gridiron action to generate revenue, from hot-dog sellers to TV advertising executives, are counting down the moments to the first big plays.

But a lot of buzz this pre-season is focusing on the growing industry of fantasy football, and that’s one way you can tackle the topic even if your regular beat doesn’t intersect much with the business of sports.   It’s got technology angles, consumer and personal finance facets, workplace and human resources ties and related issues that can be applied to just about any sector of the economy.

As Fortune reports, the consulting firm Challenger, Gray and Christmas guestimates that at two hours a day of play, this focus on imaginary teams can cost businesses $895 million a week, or more than $13 billion over the course of the season. Some articles and columns pooh-pooh the downside of the distraction, like this piece from a human resources professional association, which says the pastime promotes employee morale, teamwork and good customer relations.  I’m sure there are managers skeptical of that stance and of course the potential ills of distracted working vary by industry; you don’t want your surgeon fretting over her picks but it probably does little harm if the cable guy takes a few minutes to calculate standing.   I suggest talking with local employers, from large to small, about any workplace policies or expectations as the big season looms.  I have heard of some people receiving annual memos from employers reminding them not to play on company time; is that becoming more or less common as the fantasy play industry grows?

And of course, the personal finance angle is of interest, especially as more and more companies get into pay-to-play fantasy football with real prizes.  As Forbes reports, entities like Yahoo!, CBS and even the NFL itself are entering that arena.  Why not enlist a handful of players from among your audience and ask them to track their spending against eventual payoff?  And of course, don’t forget the income tax angle; local CPAs or enrolled agents can elaborate on the points in this Taxbrain blog post, reminding people how to report winnings as income when they file next spring’s return.

As the Fantasy Sports Trade Association notes in its media kit, imaginary play is about more than football, though it remains the most popular fantasy game.  Stats like average player age (34) and other demographic data are available in the kit, which notes the average player spends more than eight hours a week “consuming fantasy.”

To find local companies involved in the business of fantasy sports, try the member search engine on the FSTA site; you can query by state to find your area’s biz players.  What is their annual ebb and flow of business?  How is the market changing?  How is mobile technology affecting the software requirements and player demographics?




Businesses beyond retail chalk up back-to-school sales

It’s axiomatic that back-to-school season is good business for apparel and footwear sellers, purveyors of pencils and gadget suppliers.

But for an interesting twist on the standard end-of-summer stories, how about a look at other businesses that benefit from back-to-school, including unexpected sectors like lice salons and bars.  Services that reflect the realities of hectic family life will be revving up, too. 

School bus

Facebook's full of back-to-school photos and the buses are running. Photo by Flickr user Svadilfari

Even moving companies are in on the act — UHaul offers an array of services for the return-to-college cohort, including a storage service to students need not schlep their belongings home between semesters.  And check out this piece about Bellhops, a by-the-hour packing and moving helper service started by a couple of enterprising students a few years ago.  It’s now in more than 130 cities. 

The National Retail Federation says combined spending on “BTS” and “BTC” (back to school and back to college) is expected to near $75 million in the United States this year — a powerhouse spending season rivaled only by the Christmas/winter holiday mania.    The elaborate NRF portal of BTS and BTC data is a testament to just how crucial this spending impetus is to an array of retailers, from housewares suppliers to discount apparel stores.

But the resumption of academic routines and schedules also can be a boon to non-merchants.  We know that health care checkups are necessary for a lot of kids heading back to class or to sports activities;  Walgreen’s is offering camp and school physicals for $39 at its drugstore clinics — why not check in with area hospitals, health centers and doctors’ offices about trends in the business of medical checkups.  

But for a quirkier take on the health care implications of full classrooms, check into the local business of “lice salons” — practitioners who specialize in eradicating the little pests that proliferate when a lot of kids get together.   As NBC12 in Richmond, Va. reported last fall, the number of lice removal businesses has quadrupled in recent years with busy families paying hefty fees to be relieved of the problem; new technology like heat blowers is subbing for pesticides.  What on earth propels a small business person into the lice removal industry and what’s the business model?   Readers would like to know.

Other services that accommodate time-pressed families include student transportation services; sort of a mobile facet of the day care or after-school care industries.  Companies like All Student Shuttle will drive kids to and from school, appointments and activities when parents can’t, or pick up ill children from school.   This is an interesting example of how businesses spring up to fill gaps created by shifting work and household trends, from parents with longer commutes to single-parent homes with fewer car-pool options.  What considerations — like booster seats and insurance liability — are involved in creating these companies, and what are the revenue possibilities?

Demand for tutoring and  extracurricular lessons such as music, gymnastics and skating ramps up this time of year; with many parents telling the NRF they continue to be concerned about the economy & are looking for shopping bargains, I wonder if that frugal mindset will extend to spending on optional activities and lessons.

Meanwhile, when it comes to the college crowd, businesses that cater to adult needs, like bistros and eateries, are licking their chops at the return of their patrons as well.  As WBTW in Myrtle Beach, S.C., reports, “Back to school means back to business for local  bars and restaurants.”   Not to mention laundry services, salons and barbers, theaters and other firms that rely on the influx of transient residents to stay afloat. 




Retailers delight as people throw showers for all occasions

Oh, the weather outside may be delightful, but to some the forecast is frightful:  Never-ending showers.

The gift-giving type, that is.  Rites of passages of all sorts are nowadays being coopted by retailers and marketers as the ideal occasions for showers involving lots of presents and even registries.

divorce cake with bride on top

No groom was needed on top of this divorce party cake. Photo: Samantha Smith

From college students to first-time grannies to divorcing spouses to man-cave “beer & diaper” soirees, they’re all fair game.  No life transition these days seems off-limits to the idea that they should not only be celebrated, but marked with lots of loot provided by guests.

And no longer is an excuse for a shower limited to our own species; the latest buzz concerns “puppy showers” held for recent adoptive parents of companion animals.  Not surprising in an economy where pet owners lavish some $60 billion a year on furry friends, particularly as “Americans are having dogs instead of babies,” as reported by Quartz in April. At the same time, the article notes, more people are adopting small (baby-sized?) canines than any other size hound; the population of petite pooches has more than doubled since 1999.

Enter, then, the shower for pet owners, promoted of course by industry players such as Beneful dog food and Modern Dog Magazine but also a hot spot on Pinterest and other crafty sites. (Meringue dog bones, anyone?)   Sites like CafePress even offer onesies for canine wear, the better to resemble an infant.  And a number of retail sites offer pet-goods registries, according to PetPlace.com.  (One wonders what is taking the big-box pet stores so long to get on board.)

Have showers gotten out of paw…er, hand – or are they a

While some shower customs date back to ancient cultures, in the 20th century versions they involved small teas at which a handful of close friends welcomed a woman to a new life stage – marriage and motherhood.  Gift traditionally were tokens like dish towels or diaper pins.  Wedding registries were merely a record kept by department stores of a bride’s chosen flatware and china patters, so nuptial guests could discreetly order a place setting or two. Marshall Field’s reportedly launched the innovationin 1924 at its Chicago store.

fluffy dogs in a baby stroller

As birth rates fall, pet ownership grows. Photo: Weijie

Nowadays, as we know, bridal and baby showers can be huge catered affairs at function halls, involving public-address systems, assembly-line gift-opening/tracking and in some circles the services of event coordinators and bridal shower consultants  — a niche business you might profile.  Elaborate showers also likely benefit retailers, caterers, liquor stores, purveyors of party supplies and table favors; why not consult some of these small businesses about trends in shower parties in your region?

And there’s more:

  • Grandparents to be traditionally how heaped largess on their new descendants.  But in a 21st century twist, Granny and Gramps are the giftees.  Yes, outfitting their home for visits by the grandkids – or for providing lots of child care – is a growing trend.  It’s only practical, writes Grandparents.com, though the Huffington Post chimes in that it could cause issues with the real mom-to-be, who don’t appreciate sharing the spotlight.  (And are friends wondering “why don’t we all buy our own playpens?’)
  • And for dad, a “Burgers, Beer and Diapers” party requests that guests stock up the expectant father with bales of disposable nappies while quaffing some ale and enjoying a manly barbecue; Etsy sellers seem to be doing a brisk trade in invitations and related items.
  • Members of a popular etiquette site are up in arms about the notion of a gift shower for the college-bound; CBS Local in Miami also reports on the trends, noting Target stores’ gift registry for college students, too. (As some of the etiquette mavens asked, what happened to the high-school graduation gifts; weren’t they supposed to be earmarked for college costs?)
  • I’ve seen references to the new-job shower, the new-home shower and even a break-up shower for those suddenly bereft of both their boyfriend and their blender.  (Or their girlfriend and their grater, etc.)
  • In a similar vein, divorce showers are not unheard of.  Nor are retirement showers and showers for people who are moving their residence.

If you would rather tackle the consumer angle: Modern showers also represent more than a bit of investment on the part of guests, who often now are expected to pony up non-token gifts for both shower and wedding (or shower and christening, in the case of baby-related events.)  There’s a personal finance story for you – is it becoming more expensive these days to be a doting aunt or cousin of a college kid and now friend of a new pet-owner?

Try a new take on this piece that toted up the cost of being a wedding guest; which as this NBC News article noted last spring it’s up to $592.