By Paul Pannone
The cost of nearly everything continues to rise and depending where you live it rises faster and more definitely than other parts of the country. eWedNewz discussions with store owners shows that even though prices are rising profits are not. Many say the increases are just about covering costs they’re experiencing from higher working expenses and energy prices.
Spending is up for rite of passage events, especially for families barely above the poverty level. The money is coming from somewhere.
A survey released by VISA shows some encouraging– or discouraging– news for the economy, depending on your point of view. The survey says spending is up by 33% but the greatest increase comes from the lowest income group.
According to the Visa survey, families in the Midwest spend less on the prom with an average cost of nearly $700. The survey shows Northeastern families spend over twice as much with an average cost of nearly $2,000. The average American family with teenagers plans to spend $1,078 — that’s for each child — on the prom, a 33.6 percent increase over the $807 spent last year.
The Visa survey finds that families in the lower-income brackets, less than $50,000, plan to spend even more — $1,307 per child. And those in the very lowest bracket, under $20,000, plan to spend $1,200 — more than 6 percent of their annual income. The dubious part of the survey says families earning between $20,000 and $30,000 plan to spend an average of $2,635, which would represent almost 9 percent of annual income for those making $30,000. Those families are just above the federal poverty level, which is $23,050 for a family of four.
The encouraging part is spending is up at all. eWedNewz discussions with apparel store owners, limousine companies and other prom associated businesses say there’s less discounting than ever this year. Nearly all agree the worst companies were forced to fold since the 2008 economic collapse. Those that remained were the strongest and most business-minded that understand there has to be a profit for all the hard work that goes into entrepreneurship. Yet most store owners say any other profit generated by price increases are quickly eroded by rapidly rising costs, leaving no net gain.
Store owners say they’ve not seen this kind of spending in over four years and with new innovation in fashion, kids are searching for the newest styles no matter what the cost is. Stores also told eWedNewz struggling parents would rather let their teenagers have what they want for rite of passage events instead of upgrading their iPhone.
Better Tuxedo store owners say they’re able to boost net margins by renting recognized brands including Calvin Klein and Ralph Lauren. This season innovation and the addition of The Situation products is helping to boost profits.
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