How ‘Funflation’ Impacts Hobby Spending

Attention, operators of arts and crafts stores, hobby shops,  and sellers of gear for hiking, camping, skiing and scuba diving: consumers are spending in your stores, despite higher prices – or “funflation,” as Bank of America Institute calls it in a recent report on spending in this sector.

Some key findings from that study include:

• Hobby spending rose 7.9% year-over-year (YoY) in August, but this was more than double the pace of transaction growth, suggesting the re-emergence of “funflation” in hobbies, per Bank of America card data.
• Older Millennials are the biggest hobby spenders, according to that same card data, despite having the least amount of leisure time of any generation. They also have the highest share of the population with hobby spending, though this likely reflects both personal interests and spending on their kids.
• Gen Z’s hobby habits are evolving. While hobby purchases have slowed sharply, younger consumers continue to devote significant leisure time to gaming, with over a quarter of Gen Z having some type of online or video game spending, according to card data.

“In our view, it’s likely that people splurged on hobbies amid social distancing during the pandemic, then gravitated back toward pricier alternatives like travel throughout 2022 and 2023,” the report notes. “However, last year there may have been some rotation back to less-expensive leisure like hobbies as after-tax wage growth slowed considerably. Bank of America card data suggests there’s been a recent acceleration in hobby spending in the past few months, possibly as some consumers balance shift away from travel due to higher prices from rising fuel costs.”

Click here for more from the BoA Institute study.