It’s Getting Too Expensive to Have Fun (From The Wall Street Journal) [2 Articles)
~ Monday, October 23, 2023 Blog Post ~
By Robbie Whelan and Anne Steele, October 17, 2023
Prices for concert tickets and amusement-park entries have ballooned
The rising cost of fun is becoming a drag.
Ticket prices for live entertainment events, from Taylor Swift concerts to National Football League games and high-season Disney theme-park visits, rose at a startling rate this year, triggering a phenomenon that analysts have dubbed “funflation.”
Families coughed up large sums saved during the pandemic to attend live events and parks this year. Friends treated themselves to memorable performances. Mothers took their daughters to stadiums packed with friendship-bracelet-clad concertgoers to see Swift’s Eras Tour.
Now, some Americans are feeling tapped out.
Angela Wentink, 48 years old, recalls going to concerts regularly as an essential — and attainable — part of what she describes as a lower-middle-class upbringing in Massachusetts. It didn’t break the bank to see Bon Jovi.
Trying to give her children some semblance of a similar experience feels impossible. The San Antonio resident was laid off from Amazon in January, and received her final severance check around the time Swift was headed to Houston.
Taylor Swift’s “Eras” is forecast to become the highest grossing tour of all time. This could considerably add to her already sizable wealth made from music sales, strategic business moves and past tours. Photo: Getty Images
“Do I do something that feels really irresponsible and take this check and make my daughter’s dreams come true?” she remembers thinking. Wentink, who has since started working for an ad agency, said she couldn’t stomach paying thousands for nosebleed seats.
Nearly 60% of Americans say they have had to cut back on spending on live entertainment this year because of rising costs, according to a Wall Street Journal/Credit Karma survey of about 1,000 U.S. consumers conducted at the start of September. Some 37% of respondents said they can’t keep up with the rising price of events they want to attend, while more than 20% of Americans say they are willing to take on debt to continue to be able to afford their favorite entertainment activities.
Roughly 26% of respondents said they don’t spend any money at all on live entertainment, up from 16% before the pandemic, the survey found.
The cost of admissions and fees rose faster than the prices of food, gasoline and other staples in 2022, according to the Bureau of Labor Statistics Consumer Expenditures Survey. Those rising costs have continued this year.
“Anything live, anything experiential is just going through the roof,” said Jessica Reif Ehrlich, a Bank of America analyst who labeled the dynamic as ‘funflation’ in a September research note.
The latest retail-sales report on Tuesday showed spending at stores, online and at restaurants rose a stronger-than-expected 0.7% in September from a month earlier. The data show that consumers are still spending on goods and experiences, including cars and restaurant meals.
Americans were on track to spend about $95 billion this year on tickets to spectator amusements including movies, live entertainment and sporting events, according to August data from the U.S. Bureau of Economic Analysis. That is up 23% from all of last year, and 12.5% higher than the $84.4 billion spent on the same entertainments in 2019, the last year before the pandemic shut down most spectator events.
Spending at theme parks, campgrounds and related services is on track to hit $79.9 billion this year, up 3.4% from 2022 and 6.2% from 2019.
Live music in particular has undergone supercharged ticket-price increases because of strong demand from some consumers who are still willing to pay up. Music executives attribute this to the marketing power of social media and the globalization of pop music thanks to streaming, with acts such as Puerto Rican artist Bad Bunny and Korean girl group Blackpink filling stadiums across the globe during recent tours.
“We’re seeing record attendance everywhere,” Ehrlich said. “Everything is sold out.”
The average ticket price for North American tours hit $120.11 this summer, a 7.4% increase over last year and up 27% from 2019, according to Pollstar.
Fans shelled out for big-ticket shows, especially as more acts tour in stadiums. For the first time, the top five touring acts globally — Taylor Swift, Bruce Springsteen, Harry Styles, Elton John and Ed Sheeran — each racked up more than $100 million in sold-ticket revenue during the first half of 2023. Over the past two decades, there were usually no more than one or two artists at that level, according to Pollstar.
Some consumers have cut back on the total number of events they attend, saving their money for one or two big-ticket attractions this year, or have stopped splashing out for entertainment entirely.
For the June quarter this year, the average face-value ticket price for a Swift show was $254, according to Pollstar, with the listed range before taxes and fees running from $49 to $449. The Eagles notched a $239 average price, with Springsteen just below at $226. Phish tickets averaged $206.
The hottest tickets of the summer ran much higher on the resale market. The average price for Swift tickets sold in the U.S. on ticket marketplace StubHub was $1,095, with the best seats going for thousands of dollars. Beyoncé and Styles ticket sales averaged $380 and $400, respectively. After Lionel Messi joined Major League Soccer, the price of tickets to Inter Miami CF matches shot up to $255 apiece, from $30.
A data analysis from Facteus for the Journal that examined credit-card spending at 16 common entertainment vendors, including Ticketmaster, StubHub, Vivid Seats and a host of theme parks and cinema chains from early 2019 through July, found that the share of consumer spending going to ticketed entertainment has essentially recovered to prepandemic levels.
The percentage of cardholders who buy tickets to live events, however, has fallen more than 10%, suggesting that fewer people are spending on in-person events than in the prepandemic period.
At its theme parks, Disney has figured out ways to maximize how much cash each visitor spends, including by offering extra features in its smartphone apps that allow guests to skip some lines for their favorite attractions. Those extra costs, in addition to the steadily rising price of food, toys and souvenirs inside the park, have turned off some fans who are already struggling to pay for high-price flights, gasoline and hotel rooms.
Disney said Wednesday that it was raising some prices at its Disneyland park in California. Walt Disney World in Florida separately increased the price of parking and annual passes.
Before the pandemic, Julie Gibbs, a 52-year-old mother who works in university administration in Indiana, traveled to Walt Disney World in Florida twice most years. Sometimes her extended family would gather at the resort and in its theme parks for special occasions.
But after 2019, prices for tickets and costly add-ons that help visitors navigate the parks began to rise, and she and her family decided to cut out their annual theme-park vacation. They now gather several times a year at a condo in the beach town of Destin, Fla., and spend about half of the typical $6,000 price tag of their previous trips to Disney.
“Quality time with friends and family is really important, but prices have increased on so many things that I feel like we have to be better stewards of what we spend,” Gibbs said. “With Disney, they have their hand out and they just want more and more from me, and I hate that feeling.”
Last year marked the San Diego Zoo Wildlife Alliance’s biggest year for attendance, with more than six million guests, said Paul Baribault, chief executive of the nonprofit.
The starting price for a one-day pass to the zoo has risen from $56 in 2019 to $69 this year — mainly a result of wage inflation and the cost of materials such as animal food, Baribault said. Many fans became members of the alliance to reduce the cost of each visit.
The zoo now has 28,000 higher-level memberships, nearly four times as many as in 2019, and the average membership-holder visits the zoo five times a year, compared with under four times a year in 2021.
“We’re in a competitive marketplace — we have Disneyland, SeaWorld, Legoland and others right in our backyard,” said Baribault, a former Disney executive. The zoo tries to increase prices carefully so that it doesn’t spook visitors.
“If we were priced on the wrong side of the spectrum, you wouldn’t get that feel-good experience,” he said.
Source:
https://www.wsj.com/economy/consumers/its-getting-too-expensive-to-have-fun-a59e9df8
Article #2: Orange Juice Prices Are at Record Highs — and Could Keep Climbing (From The Wall Street Journal)
By Hardika Singh and Kirk Maltais, October 21, 2023
Prices at the grocery store are up more than 10% from last year
Al Underwood used to drink a glass of orange juice almost every day with his breakfast at a nearby diner before the pandemic. After the price shot up to about $3 a glass last year, he cut back to once or twice a week.
“Now it’s like, ‘forget the orange juice.’ That money will go toward the tip,” said Underwood, a 69-year-old optical wholesaler from Ridgeland, Miss. “Some things you just don’t need like you used to because prices are up.”
Orange juice prices have been climbing as citrus groves have faced a spreading greening disease and extreme weather. Prices for frozen concentrate orange-juice futures have more than tripled since late 2021 and emerged as one of this year’s top-performing commodities, with prices setting records week after week. On Friday, they jumped to a fresh record high of $3.91 a pound, up from $2.11 last October, according to FactSet.
In grocery stores, a gallon of orange juice on average cost $9.18 during the four-week period ending Oct. 7, up more than 10% from the same time last year, according to data from the Florida Department of Citrus and Nielsen.
Analysts say rising prices could drive away shoppers, deepening the yearslong slide in orange juice demand as Americans reach for a growing variety of alternatives in the beverage aisle, including those with less sugar.
This year, orange production from the Sunshine State is expected to increase from 2022’s hurricane-marred output but is still down more than 50% from two years ago, according to the Agriculture Department. Brazil, the world’s largest orange producer and the source for roughly 70% of the world’s orange juice, has also been hit by the citrus-greening disease and won’t be able to fill much of the supply gap, analysts said.
“It became clear once the harvest started, because now you’re seeing a direct impact on the crop as fruits are just falling off the trees prematurely,” said Harry Campbell, a fruit and vegetable analyst at price-reporting agency Mintec.
In Florida, farmers say trees are slowly recovering from Hurricane Ian’s devastation, but that there are no signs of relief from the disease, which can render fruit from infected trees bitter and impossible to use for juice.
“There probably isn’t a tree that’s not infected with greening,” said Steve Johnson, a citrus farmer with a 600-acre grove in Hardee County, Fla. He said his yields have plummeted from about 500 to 600 boxes of oranges an acre in previous harvests to just 150 to 200 boxes this year.
Many Florida farmers have left the business, Johnson said, with some pivoting to growing other fruits or raising cattle. Those still growing oranges are struggling to keep trees healthy.
Christian Spinosa, a fifth-generation citrus farmer in Polk City, Fla., said he’s had to double the applications of fertilizer for his citrus to ensure it gets the nutrients it needs.
“You’re just fighting the symptoms of greening, and trying to relieve that stress,” said Spinosa, who has about 1,000 acres of trees.
Higher labor costs are also hurting bottom lines; farmers say the break-even price for oranges has grown to $3 a pound or above, which they say is the highest they have seen.
Still, hedge funds and other speculative investors are betting that prices will keep rising. Commodity Futures Trading Commission data show there have been more wagers on prices gaining than on losing for 95 consecutive weeks.
Some traders think prices have neared their peak, given the volatility in wider markets that has weighed on commodity prices. Despite the pressure from the greening disease, Florida farmers say the state’s orange groves are being replenished by new plantings.
“I do see a future in Florida citrus, without a doubt,” said Spinosa.
Source:
https://www.wsj.com/finance/commodities-futures/orange-juice-price-grocery-store-98851e5c
