Time to buy a car?

Summary

Marketplace Podcast Summary: "Time to Buy a Car?" Release Date: December 25, 2024

Every weekday, Marketplace host Kai Ryssdal breaks down the day’s business and economic news, providing context beyond the numbers. In the episode titled "Time to Buy a Car?", released on December 25, 2024, the podcast delves into various topics including retail inventory management amid potential tariffs, the surge in car sales, corporate credit card fraud, the rise of premium travel experiences, and the burgeoning industry of breakup recovery services. Below is a detailed summary capturing all key discussions, insights, and conclusions from the episode.

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1. Retail Inventory Management and Potential Tariffs

Overview:
The episode opens with Kimberly Adams discussing how retailers are strategically managing their inventory in anticipation of potential additional tariffs in the upcoming year. The holiday season has been relatively normal, easing the pressure from previous years when businesses struggled with excess inventory accumulated during the pandemic.

Key Points:

• Seasonal Inventory Patterns: Retailers began stocking holiday inventory in mid-October, aligning with typical seasonal spending trends.
• Impact of Tariffs: Concerns over new tariffs, especially on imports from China, are prompting businesses to reconsider their inventory strategies.

Notable Quotes:

• Jason Miller (Professor of Supply Chain Management, Michigan State University) [01:46]: “It’s great that a lot of businesses aren’t hoarding inventory, since that can be costly because you’re not turning through your items quite as quickly.”
• Zach Rogers (Professor of Supply Chain Management, Colorado State University) [02:20]: “Now because we’re worried about tariffs, a lot of inventory is getting pulled forward maybe a little earlier than would be expected.”

Insights:

• Big Retailers Adjusting: Large consumer-facing retailers like Walmart, Target, and Costco are effectively managing inventory levels without excessive stockpiling.
• Smaller Businesses at Risk: Smaller wholesalers might hoard inventory to avoid high tariffs, potentially leading to increased costs that may be passed on to consumers.
• Economic Implications: Higher interest rates and increased warehousing and trucking costs make it challenging for businesses to maintain extra inventory without affecting consumer prices.

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2. Surge in Car Sales Amid Increased Inventory and Incentives

Overview:
Samantha Fields reports on the notable increase in car sales, both new and used, highlighting that dealerships are offering significant incentives to move inventory. This trend is influenced by increased car availability, lower prices, and external factors like storm damage.

Key Points:

• Increased Inventory: More cars are available compared to previous years, providing consumers with better choices.
• Dealer Incentives: Dealerships are offering lower interest rates and direct discounts to encourage purchases.
• Storm Recovery: Recent hurricanes (Milton and Helene) have damaged or destroyed over 340,000 cars, driving demand for replacements.
• Tax Credit and Tariff Anticipation: Potential removal of EV tax credits and upcoming tariffs are prompting consumers to buy sooner rather than later.

Notable Quotes:

• Patrick Olson (Carfax) [05:07]: “A lot of dealers have a lot of cars that they want to move. This is the time of year to get rid of the 24s and make room for the 25s.”
• Carl Brower (IC Cars) [05:34]: “People who have needed cars for a while have noticed prices are down and realize this is probably as good a time as any to buy.”

Insights:

• Market Timing: Consumers are capitalizing on low prices and available incentives, making it an opportune time to purchase vehicles.
• Economic Behavior: Increased consumer confidence and the urgency to replace damaged vehicles are significant drivers of the current car sales boom.
• Future Projections: Anticipation of tax credit changes and tariffs may sustain the high demand for cars in the near term.

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3. Corporate Credit Card Fraud on the Rise

Overview:
Kimberly Adams interviews Callum Borchers, a Wall Street Journal columnist, about the increasing incidence of fraud and misuse related to corporate credit cards. The discussion highlights both petty and significant fraudulent activities and their impact on businesses.

Key Points:

• Range of Fraud: From minor infractions like personal expenses on corporate cards to large-scale fraud attempts such as trying to expense an RV.
• Economic Impact: Fraud can cost businesses up to 5% of their annual revenue, a significant financial burden.
• Detection Challenges: Improved software detection with AI has led to higher identification rates of fraudulent activities, although actual fraud may also be increasing.
• Prevention Measures: Emphasis on regular audits and the necessity of clear company policies to distinguish between personal and business expenses.

Notable Quotes:

• Callum Borchers [09:54]: “The best estimate is that fraud of a range of types can cost businesses 5% of revenue over the course of a year, which is not nothing.”
• James Thoms (Telgen, Fire Protection Company) [10:56]: “Just bite the bullet and get that outside accountant to audit your books. I know you want to save money on, on that bill, but the cost of the fraud could be even bigger than the accounting tab.”

Insights:

• Small Businesses Vulnerable: Smaller companies are particularly at risk, as significant fraud amounts can disproportionately impact their finances.
• Employee Awareness: A substantial portion of non-compliant expenses arise from misunderstandings rather than intentional fraud, indicating a need for better employee education on expense policies.
• Technological Solutions: Advanced AI-driven tools are essential in real-time fraud detection, helping companies mitigate losses effectively.

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4. Rise of Premium Travel Experiences: Skip-the-Line Passes

Overview:
Kimberly Adams covers the growing trend of premium travel experiences, particularly skip-the-line passes at major attractions like Disneyland and Disney World. This segment explores how these offerings cater to affluent travelers and the broader implications for the travel industry.

Key Points:

• Popularity of Skip-the-Line: Over half of ticketed tourist attractions now offer some form of skip-the-line option, with an additional 18% considering adding them.
• Target Demographic: Primarily targeting affluent travelers with household incomes of at least $150,000, who are less affected by inflation and more willing to spend on premium services.
• Price Sensitivity: Despite overall increases in airline and hotel prices, affluent travelers maintain their spending habits, fueling the demand for exclusive experiences.
• Industry Impact: Such offerings create differentiated consumer experiences, potentially leading to friction among travelers of different economic backgrounds.

Notable Quotes:

• Douglas Quimby (CEO, Arrival Travel Research) [16:35]: “We define them as the affluent travelers, as household income of at least 150,000. You know, this is a subset of travelers as well that have been less impacted by inflation.”
• Alyssa Geder (Travel Agent, Magical World Vacations) [17:59]: “There are so many different tiers and levels, so it’s definitely gone from just like, oh, cool, look, we get to go through the fast lane too. Now, it’s like, okay, this is a deciding factor in our plans.”

Insights:

• Market Segmentation: The travel industry is increasingly segmenting its offerings to cater to different economic classes, enhancing the luxury travel experience.
• Consumer Behavior: Affluent travelers seek convenience and exclusivity, driving the proliferation of premium services like skip-the-line passes.
• Social Dynamics: The creation of tiered travel experiences may lead to a divide in how different economic groups perceive and enjoy travel destinations.

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5. The New Business of Breakups: Recovery Services Industry

Overview:
Samantha Fields explores the emergent industry focused on helping individuals recover from breakups. This segment highlights the variety of services available, the demographic targeted, and the economic scale of the industry.

Key Points:

• Personal Experience to Reporting: Samantha Fields' personal breakup led her to discover and investigate the range of professional services catering to heartbreak recovery.
• Service Range: Includes breakup coaches, dietitians, retreats, and specialized programs aimed at helping individuals overcome relationship endings.
• Industry Size: Estimated to be part of the larger divorce industry, valued between $10 to $15 billion, and expected to grow as societal trends shift away from marriage.
• Target Demographic: Primarily aimed at college-educated, upper-middle-class individuals who can afford premium services. For example, retreats can cost upwards of $3,000 for a weekend.
• Trend Analysis: The recognition of breakups as traumatic experiences has fueled the demand for trauma-informed recovery interventions.

Notable Quotes:

• Samantha Fields [21:21]: “There is a range like any industry, there’s this whole kind of submarket of breakup coaches who specialize in, quote, unquote, get your ex back.”
• Samantha Fields [23:56]: “A stay at the Heartbreak Hotel in England can run you around $3,000 for a weekend.”
• Samantha Fields [23:16]: “The notion that a breakup could be considered traumatic... has kind of entered the popular lexicon.”

Insights:

• Market Need: As relationships evolve, the need for professional breakup recovery services reflects changing societal attitudes towards personal trauma and mental health.
• Economic Opportunity: The substantial financial investment required for these services indicates a significant market willing to pay for emotional recovery.
• Inclusivity Concerns: The high cost of services raises questions about accessibility and whether only affluent individuals can benefit from these recovery options.

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6. Holiday Sales and Economic Indicators

Overview:
Towards the end of the episode, Kimberly Adams presents key economic indicators related to the holiday season, including retail sales projections, travel statistics, and energy prices.

Key Points:

• Retail Spending: The National Retail Federation (NRF) predicts holiday spending will reach a record $989 billion, with 71% of consumers planning additional shopping in the final week.
• Travel Trends: With the winter's peak travel season underway, TSA reports 39 million people passing through security checkpoints, a 6% increase from 2023. AAA forecasts that nearly 90% of travelers will opt for road travel, totaling 107 million people.
• Energy Prices: The national average price for a gallon of gas increased by 2 cents to $3.04. For electric vehicle (EV) drivers, the average cost per kilowatt-hour at public charging stations is 34 cents.

Notable Quotes:

• Kimberly Adams [14:54]: “Market data shows that this is one of the busiest travel times of the year with people visiting family and some going on vacation.”

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Conclusion

The "Time to Buy a Car?" episode of Marketplace offers a comprehensive look into current economic trends affecting consumers and businesses alike. From the strategic inventory management by retailers in the face of potential tariffs to the booming car sales driven by incentives and necessity, the episode provides valuable insights into the factors shaping today's market. Additionally, the discussion on corporate credit card fraud underscores the financial challenges businesses encounter, while the rise of premium travel experiences and breakup recovery services highlights evolving consumer behaviors and emerging market opportunities. Finally, the holiday sales statistics paint a picture of robust economic activity during one of the year's most critical shopping periods.

For more in-depth analysis and updates on these topics, listeners are encouraged to tune into future episodes of Marketplace.

Transcript

[Kai Rysdal]

Hey everybody, it's Kai. Time is running out to give a tax deductible donation to Marketplace before the end of the year. Donate today to support the public service journalism that you rely on. Every donation and every dollar helps us plan for the new year ahead. Go to marketplace.org donate and invest in news you value and trust. That's marketplace.org donate or you can follow the link in the show. Notes.

[Kimberly Adams]

Retailers are making their lists and checking them twice, trying to find out just how much inventory they should should stockpile ahead of the next administration. From American Public Media, this is Marketplace in Washington. I'm Kimberly Adams in for Kai Rysdal. It's Christmas Wednesday, December 25th. Good to have you along. The holiday shopping season has been, by several measures, a pretty normal one. Businesses started bringing in their holiday inventory in mid October, according to the most recent Logistics Managers Index, and consumers bought a lot of that inventory in November, according to spending data out last week from the Bureau of Economic Analysis. These normal seasonal patterns are a big relief for businesses, since many have spent the last few years trying to get rid of excess inventory they built up early in the pandemic. But the prospect of additional tariffs in the year could cause many businesses to start building up their inventories again. Marketplace's Justin Ho has more on what's at stake.

[Justin Ho]

The kind of businesses that have made the most progress bringing inventories back to normal levels are big consumer facing retailers.

[Kai Rysdal]

So what we call general merchandisers, your Walmarts and your targets of the world and Costcos.

[Justin Ho]

That's Jason Miller, a professor of supply chain management at Michigan State University. He says many big retailers use discounts to get rid of their extra goods, and consumer spending has been pretty strong, miller says. It's great that a lot of businesses aren't hoarding inventory, since that can be.

[Kai Rysdal]

Costly because you're not turning through your items quite as quickly. And also the longer it takes you to sell something, the more likely it is to get damaged or, you know, just essentially go obsolete and lose value.

[Justin Ho]

That said, there are signs that importers are bringing in extra inventory ahead of any new tariffs on imports from China, says Zach Rogers, a professor of supply chain management at Colorado State University. He says he first noticed the pickup around mid December, around five or six weeks after the election.

[Kai Rysdal]

And to me that suggests that now because we're worried about tariffs, a lot of inventory is getting pulled forward maybe a little earlier than than would be expected, rogers says.

[Justin Ho]

If that continues, businesses might have a harder time holding extra inventory than they did a few years ago. For one, interest rates are higher, which makes it more expensive to buy inventory. And if all that hoarding pushes up warehousing costs or trucking costs, importers would have to decide whether to pass those costs on the consumers.

[Kai Rysdal]

And consumers are very sensitive to costs. And so it's going to be more difficult for importers to just slap those.

[Justin Ho]

Costs to a consumer base that honestly.

[Kai Rysdal]

Is tired of prices going up.

[Justin Ho]

Some businesses might decide that the cost of extra inventory is worth it. Jason Miller at Michigan State University says if a smaller wholesaler, for instance, needs to stock a good that could be hit with President elect Trump's proposed 60% tariff on Chinese imports, it may make.

[Kai Rysdal]

Sense to order an entire year's worth ahead of time in order to get that product in and not pay 60% more for that.

[Justin Ho]

Meanwhile, Miller says, big retailers might choose to keep their inventories low and simply pass the cost of any tariffs on the consumers. Justin I'm Justin Ho for Marketplace.

[Kimberly Adams]

Markets were closed for the Christmas holiday today. But don't worry, we'll still have some numbers for you. Like Justin was just saying, figuring out what consumers are willing to buy and when and at what price matters a lot for businesses and for the broader economy, about two thirds of which is just consumer spending, which was up again last month. Along with retail sales driven largely by an increase in car sales, Marketplace's Samantha Fields has more.

[Patrick Olson]

Now is actually a decent time to buy a car if you're in the market for one.

[Samantha Fields]

There's a lot more inventory than there was in the last several years.

[Patrick Olson]

Patrick Olson at carfax says if you're considering a new car, many dealerships are also offering incentives these days, like lower interest rates on car loans than you could get from a bank and straight up discounts in some cases.

[Samantha Fields]

A lot of dealers have a lot of cars that they want to move. This is the time of year to get rid of the 24s and make room for the 25s.

[Patrick Olson]

There's evidence more people have been buying cars lately in that most recent retail sales and consumer spending data. And in addition to that, Carl [e-mail] says new car prices, which had been falling, have ticked up slightly in the last couple months. And the average number of days new cars are on the lot has dropped a little.

[Kai Rysdal]

So that shows an increase in demand and the cars are moving quicker.

[Patrick Olson]

There are two main factors he says are likely driving this increase in demand for cars new and used.

[Kai Rysdal]

I suspect it's a combination of the prices finally hitting a level that people feel more willing to make a purchase, as well as some replacement of vehicles damaged in the recent storms.

[Patrick Olson]

More than 340,000 cars were badly damaged or destroyed this fall in hurricanes Milton and Helene, according to carfax. And many people are looking to replace them. And then there's the expectations game. Dan Ives at Wedbush securities says when it comes to electric cars in particular.

[Justin Ho]

Everyone knows that that tax credit's gonna.

[Kai Rysdal]

Get pulled once Trump gets in office.

[Patrick Olson]

If you buy an EV right now, you can get a $7,500 tax credit for many models. But Trump has indicated he might get rid of it.

[Justin Ho]

So you're seeing some buying in anticipation of that.

[Patrick Olson]

And he says you're also seeing some people buying in anticipation of possible tariffs which could drive car prices back up. But more than anything, Carl Brower at IC Cars says he thinks people who've needed cars for a while have noticed prices are down and realize this is probably as good a time as any to buy.

[Kai Rysdal]

There's been a lot of people who've been waiting on the sidelines and we've just hit a threshold now where a certain amount of them finally got off the bench and came into the game.

[Patrick Olson]

To buy a car because they couldn't afford to wait any longer. I'm Samantha Fields for Marketplace.

[Kimberly Adams]

As we wind down the year, many companies are trying to close out their books and figure out their own spending for the year, some of which may kind of depend on you and just how you've used your company credit card if you have one. If you do, it's probably for things like business trips, team lunches, project related purchases, things your boss would sign off on. But there are people out there who are using their corporate cards for slightly less business motivated buys or sometimes outright fraud. Here to chat about the use and misuse of company spending accounts is Callum Borchers. He's a Wall Street Journal columnist. Callum, welcome to the program.

[Kai Rysdal]

Glad to be with you.

[Kimberly Adams]

So what even got you looking into this?

[Kai Rysdal]

You know, I had done a story earlier this year about companies sort of cracking down on what some of us think of as kind of like small, persnickety company rules. And what came up a lot in those conversations was, hey, there's also big stuff, by the way, including corporate count fraud. And so I sort of got working on this with the question of is this going up or down? And the answer is it appears to be going up, although we can't be certain. The twist on it is that the software detection has gotten so much better. Right. This is one of the Many side effects of artificial intelligence. And so firms are catching more shenanigans than they did in the past.

[Kimberly Adams]

So give us some examples that you heard about as you were doing this reporting of the kind of fraud companies are seeing on these corporate cards.

[Kai Rysdal]

You know, it really runs the gamut from little stuff to big. So I mean, on the smaller side, it might be, hey, I'm going to put date night on the company credit card, right? And try and pass off this outing with my spouse as a business dinner. I got a chuckle out of a story about somebody who had been working in an office where they had free coffee every day. And then when he went to work for from home, he figured, well, I'm still entitled to my free coffee. So he started expensing his daily Starbucks run, including the mileage from his home to the coffee shop, which I thought was really next level. But then you also get some really outlandish cases, right? Like somebody who tried to expense the purchase of an rv. I was like, how on earth does that happen? Well, SAP concur explained to me this was a case where somebody was going to be on a six month extended assignment and tried to say, well, you know, six months in a hotel room gets kind of expensive. It would actually be more cost effective to just buy me a recreational vehicle. That one got declined. But it really just shows you the range of things people will try to slip through on the company dying sometimes, right?

[Kimberly Adams]

And you know, you report that a lot of these people just figure it's not that big of a deal. But how much of an impact is this having on businesses?

[Kai Rysdal]

Well, the best estimate is that fraud of a range of types can cost businesses 5% of revenue over the course of a year, which is not nothing, right? I mean, that can be real dollars. And of course, a lot of it depends on the scale of the company. Smaller businesses, I think, are really the ones that, that run the risk. You know, I was thinking of a conversation I had with James Thoms, who has a fire protection company called Telgen. It's a decent sized firm now, but he said when we were just starting out in the 90s, you know, we had a fraud case that really was a big problem for us. It was about $50,000, which may not sound like a lot, but for a company our size, it was a big problem to the point where he decided to forego his own salary, you know, for several months to try to dig the company out of the hol. So, you know, his point, his plea basically to other small business owners was Just bite the bullet and get that outside accountant to audit your books. I know you want to save money on, on that bill, but the cost of the fraud could be even bigger than the accounting tab.

[Kimberly Adams]

So other than having, you know, an accounts payable department kind of going through all this and auditing, what sorts of tools and recourse do companies have to fight back against this?

[Kai Rysdal]

Well, the software that they're using is getting ever more sophisticated, but the bookkeeping tools that every company uses can only go so far. You really need that extra set of eyes to say, hey, does this look suspicious? And try to suss it out. They try to make a game out of it. At SAP, they have unofficial quarterly awards for the auditors who catch the most outlandish expenses. I think one of the things that is interesting now is sort of the real time nature of trying to catch expense fraud, right. Because typically it's really hard to recoup that money if the purchase is already made. There are things that card issuers are offering now as additional features to employers because they're mindful that this is a really in demand thing for, for companies right now. They do not want to be bamboozled and they feel like they can't afford to be.

[Kimberly Adams]

There was one example you include in your piece about somebody who tried to expense makeup and her argument was that, you know, she has a customer facing job and the company didn't want to pay for that. But how much of this spending is actually speaking to maybe a bit of a disconnect between what employees feel like they need to do their job that they feel like should be covered expenses versus what work actually provides.

[Kai Rysdal]

There is sometimes actually a blurry line between what is a personal expense and what's legitimate business expense. And so sometimes companies policies are not super clear or sometimes they're just so voluminous that it can be hard for employees to figure out what what is allow and what is not. Roughly, 1 in 10 of these expenses are not compliant when employees submit them. And a lot of that, I'm told, is not because it's some, you know, nefarious attempt to scam the company. It's often just because people aren't familiar with what the policies are, what, what am I allowed to put on the card and what is over the limit and what is actually a prohibited category.

[Kimberly Adams]

Callum Borchers is a columnist at the Wall Street Journal. Thank you so much.

[Kai Rysdal]

Glad to be with you. Thanks for having me.

[Kimberly Adams]

Coming up.

[Samantha Fields]

I came to this story through personal.

[Kimberly Adams]

Experience, the Business of Breakups. But first let's do the numbers. The markets are closed today for the Christmas holiday, so let's look at some other numbers. Yesterday we had a story about the ever popular Fraser fir sold as Christmas trees in North Carolina. That State is number two for Christmas tree production. Oregon is number one, producing some 4.7 million trees each year. We're in the middle of the winter's biggest travel season with TSA already reporting some 39 million people traveling through security checkpoints. That's up around 6% from 2023. But according to AAA, nearly 90% of travelers will get to their destination on the roads this season, or 107 million people. The national average for a gallon of gas rose 2 cents to land at $3.04. And for EV drivers, the average for a kilowatt hour of electricity at a public charging station is 34 cents. You're listening to Marketplace. Neat parts now.

[Kai Rysdal]

O'ReillyAuto.com offers in store pickup, same day home delivery or next day home shipping. Get more parts your way at O'Reilly Auto Parts. Auto Parts.

[Kimberly Adams]

This is Marketplace. I'm Kimberly Adams. Like we said in the numbers, this is one of the busiest travel times of the year with people visiting family and some going on vacation. Two of the biggest destinations for that are Disneyland and Disney World. And the parks offer a bunch of skip the line passes, including a new one launched earlier this year. For several hundred dollars on top of the price of a park ticket, you can skip the line on just about any ride. Disney's not the only place selling line skips. It's a trend that's creating a different consumer experience if you can afford it. Marketplace's Sean McHenry reports.

[Douglas Quimby]

When Melissa Holguin bought her first ever skip the line tickets a little over a year ago, it was kind of a happy accident.

[Kimberly Adams]

We traveled to Europe and the Vatican tickets, the regular ones, were sold out. And the only option, well, one of the options was breakfast and skip the line, which added significantly to the costs.

[Douglas Quimby]

They were about $70 US per person. For comparison, regular entry tickets were around $20. In return, they could get into the Vatican Museum's and Sistine Chapel an hour before everyone else. And that extra hour came with zero buyer's regret.

[Kimberly Adams]

So it was really nice to be able to see all of the artwork the whole way and all the sculptures without really a lot of congestion. We just kept saying, thank this, we did this.

[Kai Rysdal]

Skip the line and VIP experiences within travel has been growing quite significantly over the past several years.

[Douglas Quimby]

Douglas Quimby is the CEO of the Travel research firm Arrival. In a survey this year, they found that over half of ticketed tourist attractions offered some kind of skip the line, which makes sense to him.

[Kai Rysdal]

There's a subset of travelers. It represents about a fifth of all travelers. We define them as the affluent travelers, as household income of at least 150,000. You know, this is a just a subset of travelers as well that have been less impacted by inflation. So they're continuing to travel, they're continuing to spend.

[Douglas Quimby]

Last month, airline prices were up almost 5% and hotel prices over 3.5%. That's according to the Bureau Labor Statistics. Quimby says that the people who are the least affected by all that are the people being catered to.

[Kai Rysdal]

But there is also that risk of social, I don't want to say conflict, but maybe a, you know, a friction because it does create, you know, different classes of travelers.

[Douglas Quimby]

For the people working in the travel industry, this is what they focus on and have built their businesses around.

[Kimberly Adams]

It is definitely one of the first things, if not the first thing, that clients ask when they reach out to me to start quoting and booking their trips.

[Douglas Quimby]

Alyssa Geder is a travel agent at Magical World Vacations. She also runs a TikTok account where she talks about planning Disney trips. She's part of Disney's earmarked program and is commissioned by Disney.

[Kimberly Adams]

There are so many different tiers and levels, so it's definitely gone from just like, oh, cool, look, we get to go through the fast lane too. Now. It's like, okay, this is a deciding factor in our plans, just as it is with, you know, budget dining, hotel.

[Douglas Quimby]

And that income level distinction is. It factors into all that she does.

[Samantha Fields]

It's very funny when I explain this.

[Kimberly Adams]

Because it is a lot and I feel like I'm standing in front of like a corkboard with, with yarn and all of these different things going in different directions.

[Douglas Quimby]

There's a good chance that line skipping offers are going to become even more common in arrival survey. On top of the 51% of attractions that already offer them, another 18% are thinking about adding them next year. I'm Sean McHenry for Marketplace.

[Kimberly Adams]

Even though the holidays are often about connection, at least some people may be spending this festive time of year nursing a breakup. Most of us will have at least one bad breakup in our lives. And while friends and family are often all too happy to step in with advice, sometimes the ice cream and sad music and purging of your ex's stuff isn't quite enough. But where some see heartbreak, others See a business opportunity. Jennifer Wilson is a staff writer for the New Yorker and documented the growth of the heartbreak recovery industry. Jennifer, welcome to the program.

[Samantha Fields]

Thanks for having me.

[Kimberly Adams]

So what led you down this rabbit hole of the breakup business?

[Samantha Fields]

I came to this story through personal experience. The beginning of the summer, I was dumped by text message by someone I was very, very excited about. You know, I just had dinner with a bunch of my friends and had told them all about him, and I was so excited. And so, you know, they were asking, of course, for an update, and I had to update them that he just wanted to be friends. And one of them asked me, you know, if I had a plan, if I had had kind of like a breakup plan. And I wasn't sure what she was referring to, so I. I just kind of googled breakup plan because she said it with such authority. And, you know, I saw all of these worksheets and books and daily planners for helping you get through a breakup. And I discovered this world of breakup coaches, breakup dietitians. And then I found lots of retreats, kind of breakup themed vacations. And, you know, so I went to my, you know, heartbroken. I went to my boss and said, you know, why don't we send me to some of these luxury retreats and see, see what they're all about.

[Kimberly Adams]

So who exactly is getting targeted by some of these businesses?

[Samantha Fields]

That's a good question. And I mean, these businesses, there's a range like any industry, you know, there's this whole kind of submarket of breakup coaches who specialize in, quote, unquote, get your ex back. You know, they're teaching you things like how to manifest your ex back. They're charging quite a lot of money. You know, some of these one on one, get your expat coaches are charging, you know, several hundred dollars for, you know, one on one session. So, I mean, frankly, you know, they're all targeting heartbroken people, broken people, in terms of the gender breakdown. Some of these retreats focus on women. I went to a retreat in the Berkshires at the Kripalu Yoga center called Healing from Heartbreak that was focused on working with women. You know, I mean, I. So the short answer is everyone. And that's kind of why I was interested in this story, is because it's hard to think of a person who has not been affected. I mean, this market is huge, and so I wanted to sort of get in early and try to understand what. What's happening and who all the players are.

[Kimberly Adams]

And do you have a sense of how big this industry is how much money is actually involved here, you know.

[Samantha Fields]

No one knows for sure. And what you include in that is hard, hard to say. But I think that the estimates for, you know, it's been estimated that the divorce industry is worth, I believe that number, 10, $15 billion. And as I say in the piece, you have more and more people choo choosing not to get married. You have more and more people cohabitating. So you're going to have more and more people going through not divorces, but breakups. And so I think it's a growth market.

[Kimberly Adams]

Well, I was curious, have these kinds of businesses always been around or is there something new happening right now?

[Samantha Fields]

I think that, you know, none of the interventions that the people I spoke with are particularly new. But what I would say is new is the notion that a breakup could be considered traumatic. And so you're also seeing the rise of trauma that has just kind of entered the popular lexicon. And so I think there's more people who are trauma anxious. And so I think that that's also sort of fueling the rise of these retreats and what many of them talk about using kind of trauma informed interventions.

[Kimberly Adams]

And how much does one of these retreats cost?

[Samantha Fields]

That's a good question. And I mean, you know, I think earlier you had asked me, who are these programs targeting? I mean, it's important to note these are not cheap. A stay at the Heartbreak Hotel in England can run you around $3,000 for a weekend.

[Kimberly Adams]

Wow.

[Samantha Fields]

Yeah. So a number, some of these breakups coaches can charge, you know, hundreds or, you know, thousands of dollars to work with them, depending on how many sessions you need. So this is something that is targeting college educated, upper middle class segment of the population.

[Kimberly Adams]

Jennifer Wilson is a staff writer for the New Yorker and her piece is called the New Business of Breakups. Thanks so much.

[Samantha Fields]

Thank you for having me.

[Kimberly Adams]

This final note on the way out today, the pressure of shopping for gifts might be over for many of us, but that doesn't mean holiday sales are letting up. According to the National Retail Federation, 71% of consumers plan to shop over this next week to use gift cards, return presents, or take advantage of sales and promotions. The NRF predicts holiday spending will reach record levels this year with consumers spending a collective $989 billion. Our media production team includes Brian Allison, Jake Cherry, Jessyn Duller, Drew Jostad, Gary O'Keefe, Charlton Thorpe, Juan Carlos Tirado and Becca Weinman. Jeff Peters is the manager of media production and I'm Kimberly Adams. We'll see you tomorrow. Everybody, this is apm.