Bad Economy Good for Gun Sales
It’s commonly accepted that some products manage to continue selling well during tough economic times. Lipstick is often pointed to as one such category of products. Now, a Washington Post report identifies another product, pricier than the typical lipstick, which also appears to get a boost when things are not going so well on Wall Street and Main Street – firearms.
James Purtilo, publisher of the gun advocacy Tripwire Newsletter and the MyGuns.net website, said, “Generally, we know that hard economic times always result in firearm sales.”
For the year, firearm sales are up eight to 10 percent.
Other factors that create uncertainty around gun ownership have also influenced sales in the past. According to the Post, sales of semiautomatic military-type rifles increased in 1994 at the same time that President Clinton was seeking to ban the weapons.
The National Rifle Association (NRA) and other advocates of gun ownership have promoted the notion that a Barack Obama presidency would endanger the right of Americans to own guns. The NRA claims that if elected, Mr. Obama “would be the most anti-gun President in American history.”
“Even though [Obama] has a lot going for him, he’s not very pro-gun,” Paul Pluff, a spokesman for Smith & Wesson, told the Post. Those who want guns, he said, are “going to go out and get [firearms] while they still can.”
Mr. Obama, for his part, told an audience in Lebanon, Virginia on Sept. 9, “I just want to be absolutely clear. I don’t want any misunderstanding. When you all go home and you’re talking to your buddies and they say, ‘He wants to take my gun away.’ You’ve heard it hear. I’m on television so everyone knows it. I believe in the Second Amendment. I believe in people’s lawful rights to bear arms. I will not take your shotgun away. I will not take your rifle away. I won’t take your handgun away.”
John McCain’s credentials as an advocate of the Second Amendment have also been questioned in the past based on his votes in the Senate in support of some gun control measures. Mr. McCain’s selection of Sarah Palin as his running mate has appeared to allay the fears of enthusiasts and the firearms lobby.
Discussion Questions: Are there products aside from lipstick and firearms that seem to thrive during tough times? What is it that drives some categories to do well during tough economic times while others do not?
There will absolutely be a large number of products that will do better when economic times are tough, and many of these are less obvious because of the irony. When times get rough economically, many consumers will purchase affordable luxuries and consumer goods that serve as alternatives to expensive medical care and health care. Category managers, beware: some of the more expensive items you sell will thrive as less expensive alternative solutions for your consumers. Be careful what you cut!
My knee-jerk response to the question was “bad advice” (increases during “tough times”), but there’s plenty of that during “good times” as well; indeed the bad advice (followed) often turns the good times to bad.
On a more tangible level, I’ve heard that educational spending–at the individual level–rises, which certainly makes sense…though, as always, it’s often hard to discern a blip from a general trend.
There are several factors that are not taken into consideration in this article. For one, the WP is very pro-Obama, and very anti gun. The possible push to change the laws regarding firearms ownership, as well as a possible attempt to weaken the Second Amendment have some impact on the increasing sales of firearms, but I believe it to be a minor factor in that increase.
Also to be taken into consideration is the fact that Democrat lawmakers will attempt to revive attacks on the gun making industry and overturn legal decisions by various courts that have upheld the notion that manufacturers are not responsible for crimes committed with weapons that they have made. Should such a push gain success, the result will be a decline in the number of those manufacturing guns, and an increased cost do to the increasing level of liability these manufacturers must pay for in litigation expenses.
A third factor is the rise in crime rates due to increasing numbers of theft and burglary related incidents. Protection accounts for a large portion for the use of new guns being purchased.
And then there is the hunting for food factor. After the election cycle has concluded, commodity prices will begin to rise again, including food prices. Meat categories will have to rise as well to cover the increasing costs of grain and transportation. Many one-time hunters, as well as new hunters will be hunting for food.
A fifth, and little discussed factor due to its political implications, revolves around the discussions concerning the possible terrorism element. A growing number of citizens in this country are becoming concerned with this issue that never have been before. This goes back to the protection factor, but has entirely different ramifications to the marketplace.
So, my guess is that while the possible election of Obama may be an impetus for the increased sales of firearms, I do not believe it is the main reason.
Let’s not discount guns as a relatively safe investment, which could lend to the correlation between economic uncertainty and an increase in consumer gun sales. The Post article only barely mentions this. Rarely do well-cared-for guns–even inexpensive ones–depreciate. When American consumers weigh their decision to purchase big-ticket items, one consideration they take into account is the future value of the item. Guns hold their value, and many appreciate considerably.
I think the FUD factor around politics and the economy (the “gun shop talk” referenced in this article) is one part media hype and one part grown men stretching to rationalize their purchase as necessity.
In this economy, perceived long-term value will carry more weight in the decision to purchase big-ticket items.
My first observation is that Mr. Anderson’s setup of this discussion seems to be more of a political statement on the current election and gun ownership than a business discussion. Since that is inappropriate for this forum, I will leave it at that.
In terms of products that sell better in tough economic times;
1) Home repair — especially paint
2) Food staples — rice, potatoes, beans, flour, etc.
3) Cheap indulgences — snacks, candy, home baked goods
4) Little pleasures — movies, DVD rentals, magazines
5) Mini-vacations — the close-to-home/stay-at-home kind
6) DIY items — small auto repair, minor home repair
I’m sure there are dozens I’ve missed, but just as surely as the short sellers know how to make money in a down market — retailers do as well.
I think the real question should be “does a slowing economy result in higher firearms sales, or just times when people feel emotionally despondent?”
Tough times, high unemployment, rising crime, and national security area all taking their toll on the American public. As a Canadian, I can see from the outside how American citizens are looking for coping strategies. My only concern regarding firearms in times like these is how many people are choosing to actually use them, either on someone one else or on themselves.
It used to be that cigarettes and liquor sales increased during recessions, so it will be interesting to see if that continues as a trend. The price and demand characteristics of these categories has changed quite a lot since the last time we had a serious downturn, including the hiking of taxes and, in the case of cigarettes, a limiting of places where smokers can actually smoke.
Having watched these categories for almost 25 years, my guess is that liquor will trend up at a rate similar to guns, that is, about 10%, and sales of cigarettes will decline at a slower rate than it has been.
I think the economy is by far the biggest factor in the rise of gun sales. I have heard more than one person claim that they are stocking up on ammunition and getting prepared to defend their home. This is scary talk that has been brought about by the economy and all the gloom and doom talk on TV. When the President of the US talks about how bad the financial crisis is and it is echoed by the Secretary of the Treasury and other political leaders, it creates a fear in many people that can result in irrational behavior. Then, add in all the business news reporters that continue to make news by comparing this recession to the great depression and it builds the fears. The public’s confidence in government is at an all time low and the current political choices do little to reduce their apprehension.
In my opinion, I think you are all missing the real point here that is actually alluded to in the article. I don’t think it is the economy that is driving the increase in gun sales as much as it is the election. The people under the misconception that Obama will take their guns away are flocking to the stores to “stock up” in case he wins the election. The NRA is also fueling the fire.
I would be curious to see how gun sales increased or decreased prior to other election cycles. I am guessing you are going to see similar trends whenever a “liberal” candidate was leading in the polls, or conversely when a “gun toting conservative” was leading.
I also agree with Ben Ball’s list of categories. Hard times drive low-cost alternative and small indulgences. I would also add Private Label brands and Home Meal Replacements.
I don’t necessarily believe this article was meant to be a political statement, as one reader did. Don’t confuse the facts about which party supports which issues. It is a fact that Democrats often support gun control, which translates to consumers buying more guns because they perceive their guns will be taken away. Republicans generally support the NRA and Second Amendment rights, so consumers are put at ease when they know a Republican is in office. As of the polls today, readers/consumers believe that a possible Obama Presidency is a threat to their sport. They are simply taking action by purchasing their guns now. Facts are facts–it is not political.
I blame much of this on an irresponsible and People-magazine-type media. Although fears that major economic upheavals are coming were not the motivating factor that had me leave NYC 7 years ago (5 days before 9/11) for rural Vermont, I can tell you that there’s a fairly widespread undercurrent here that if “it hits the fan,” city people will be leaving in droves to loot outlying areas. I’m certainly not sure that would happen, but I can tell you that if it does, the firepower up here–much of it purchased in the past year or two–is extraordinary. And the buyers are generally not hunters, who are an aging demographic fenced out by “No Hunting” signs.
I support gun ownership and I shoot (but don’t hunt). Nevertheless, I’m a little saddened by the siege mentality we’re evolving into. And, to bring this full circle, I blame much of it on what passes for “the press” today.
I’m with Ben Ball. Little indulgences will be the order of the day. We’re looking at the potential of people having to make fairly dramatic changes to their lifestyles–holding on to older cars, deferring college, staying in homes they’d like to sell. In an environment like that, it’s easy to anticipate increased sales of treats like chocolate, or a scented candle for the living room.
Guns? No idea.
This is scary. I’m guessing these are not new hunters who will use the firearms to secure food for their families. This, combined with the typical rise in alcohol sales during tough times, is a problem percolating in a climate of increasing social unrest.
What I plan to buy is more airline tickets. I want my family around me more than ever, so we will make plans for a couple of trips to warmer climates this winter so everyone can have a much-needed respite from all this stress (and Michigan cold). There are some real deals to be negotiated on beach rental condo’s and houses on vrbo.com.
I am still busy supporting all products made or grown in Michigan, to help business in my own backyard as much as possible.
Lipstick, firearms, and Sarah Palin. Be still my heart. As a certified rangemaster, marksman, and experienced handgun competitor, let me suggest that sales of bullets will also enjoy an increase. All types of ammunition will be in greater demand, including self-loading gear, gunpowder, brass shells, the aforementioned bullets, shotgun shells, primers, and steel shot. (These elements are combined in various ways to create cartridges. Cartridges are not bullets or vice versa.)
So you’re thinking “Duh!, Doc, increased firearms sales means increased ammunition sales.” Not so, Grasshopper. Most handguns are purchased “to have,” not to shoot. A box of cartridges accompanies the sale, and they rest together in a drawer forever. Handgun and trap (shotgun) shooting are very popular hobbies and entertainment. It’s a lot cheaper to take your kids to the range than to a professional sporting event, they’ll remember it forever, and they’ll not be knee-jerk fearful of firearms as some of our commentators seem to be. Affordable trips to the range for entertainment will put those newly-purchased firearms to use in the way they were intended. And burn up some ammo.