The Hermit Economy
Even with lockdowns in the rearview mirror, consumers today remain hesitant to spend big on going out. But that doesn’t mean they’re not still spending while staying in.
This post-pandemic trend — dubbed the “hermit economy” — could potentially signal a long-term shift toward a home-centered lifestyle and economy.
From dining out to recreation, outdoor leisure pursuits have seen a downturn.
Consumers across the world are currently spending $600 billion less on services than expected, according to an Economist analysis of 32 OECD countries. Instead, they’re opting to spend more on tangible goods like kitchen appliances and clothing.
The effects on the service sector have been tangible too. Olive Garden-owner Darden Restaurants (DRI) has taken a 20% hit to its patronage since pre-pandemic. Beauty services like hairdressing are seeing a similar downturn.
Home Is Where the Market Is
Conventional wisdom might be that pent-up demand for services would lead sales to soar post-pandemic. And while the sector has seen some spikes attributed to revenge spending, when we zoom out the numbers tell a different story.
The primary driver of the hermit economy is unclear. Lingering reluctance for close-contact services, the rise in remote work, and a shift in social values could all play parts.
But the trend’s importance is clear, for companies and consumers alike. The services shoppers value most today are ones that can be enjoyed from the comfort of home.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.