Business Blog

By Leah Walker — Better put down the plastic guitar. The rock ‘n roll lifestyle is so last year.

A report by TD Bank Financial Group Economist Diana Petramala shows over the five years leading up to the current recession, Canadians were shopping hell bent for leather.  “Households,” she notes, “bought new cars, fancy home furnishings, the latest fashions, and ate out at their favourite restaurants… [They] overspent relative to their income, became over extended with debt and saved too little. Now, with the Canadian economy in recession, it is of no surprise the period characterized by consumerism has ended.” Petramala figures thanks to the shift to thrift, our personal savings rate will remain elevated in the coming years, averaging 6-7%.

Our budgets may now be more befitting of roadies than rock stars, but even the rock stars are finding themselves unable to act like rock stars. They are looking for as many ways as possible to attract fans who have become increasingly reluctant to part with their money. Bands are heading out on tour; it seems as if a growing number are re-uniting; and more and more are getting involved in the gaming industry — not Caesars Palace, but the kind you don’t have to leave your couch for: Guitar Hero and Rock Band.

Samantha Stevens from our sister station, JACK FM, tells me, “Some [musicians] are getting really creative in an effort to forge a connection with the fans… The bands have to tour to make the money, they have to sell merch, get signed with video games and land on movie soundtracks.  The gaming industry is huge for rock bands. The Guitar Hero franchise has added a new dimension to the industry.”

As well, she says, tons of older bands are out on the road: Aerosmith, ZZ Top, ACDC, Whitesnake, Judas Priest, Elton John/Billy Joel, Def Leppard, John Fogerty, KISS, The Moody Blues, Pearl Jam, The Eagles, and Kid Rock among them. Some of the tours are in support of a new album, but most are not.

So how long will the rock world be trying to win us back as we put our spending on “mute”? In a note to clients, Economist David Rosenberg, formerly with Merrill Lynch, and now chief economist and strategist at Gluskin Sheff & Associates, says “Attitudes towards credit, discretionary spending and homeownership have changed, and the change is secular in nature, not merely cyclical, meaning that this shift towards frugality is going to last for years.”

I guess it’s time — metaphorically speaking — to re-examine the contents of our back-stage candy bowls. Maybe the rockers, and the rest of us, should develop a taste for no-name M&M’s.