GDP has fallen for two straight quarters, stoking flames of a recession, so we have some recession-proof sectors in this week's Five For Friday.

Simone Del Rosario Business Correspondent

5 recession-proof industries that can weather an economic downturn

Jul 29, 2022

Simone Del Rosario Business Correspondent

By Simone Del Rosario (Business Correspondent), Brent Jabbour (Producer), Brian Spencer (Editor)

There’s a lot of talk about a recession out there considering the economy just notched its second consecutive quarter of contraction. The nation’s largest retailer Walmart is already sounding the alarm that its profit outlook for this year isn’t looking great. But some companies actually thrive during a downturn, so here are some recession-proof sectors in this week’s Five For Friday.

#5: Candy

Sure, it may seem silly, but when times are tough, you need an affordable luxury. Sweets give you a dopamine hit that makes you feel good. The people behind Cadbury probably got a rush during the Great Recession when the company reported record profits in 2008. For more historical context, Reese’s Peanut Butter Cups launched in 1928, right before the Great Depression, and are still the best candy out there by far–don’t @ me.

#4: Discount stores & consignment shops

Bargain shopping during a recession is an absolute must. In fact, during the global financial crisis of 2008, Dollar Tree stores reached a record $4.64 billion in sales. That spike was reflected in its stock price, which surged more than 80% that year. Shoppers that are into high fashion and just can’t get their fix from a discount store can turn to thrift and consignment shops to find the best deal. But you have to understand that the item will likely be slightly used. These shops are also an excellent place to pad your pockets during these tough times by selling items that have been collecting dust in the closet.

#3: Repair services

When Americans are strapped for cash, they are more likely to fix a broken screen than go out to buy the latest iPhone. People will also try to squeeze out every last mile from their car, which helps auto shops do pretty well. Meanwhile, recessions force homeowners to go for minor repairs rather than big renovation projects. And the brave even opt for do-it-yourself fixes to save some cash. Hopefully they know what they are doing…otherwise, those fixes can become even more costly.

#2: Budget travel

The travel industry generally takes a hit when people have to tighten their belts, but whether it’s for business or pleasure, people still have to get around. During these times, travelers are likely to go the budget airline route, even if that means being corralled on a Southwest flight or getting nickel and dimed on Spirit Airlines. Buses and trains get much more traffic as well. Don’t forget the great outdoors. Camping is a recession-proof business replacing hotels when you need to get away.

#1: Alcohol

It’s going to take a lot more than tough financial times to bring down the alcohol industry. A study from researchers at the University of Buffalo found people tend to drink more during recessions than in times of prosperity. But habits do change: In 2008, beer sales took a dive while hard liquor sales went up. The same thing happened during the recession of 2001. It appears folks are looking to get more bang for their buck.

SIMONE DEL ROSARIO:

WITH SO MUCH TALK OF A RECESSION, RETAILERS LIKE WALMART ARE ALREADY SOUNDING THE ALARM THAT THE PROFIT OUTLOOK ISN’T LOOKIN’ TOO HOT THIS YEAR. BUT, SOME COMPANIES ACTUALLY THRIVE DURING A DOWNTURN. WE’VE GOT SOME RECESSION-PROOF SECTORS IN THIS WEEK’S FIVE FOR FRIDAY.

WHEN TIMES ARE TOUGH, YOU NEED AN “AFFORDABLE LUXURY.” THAT’S WHY THE CANDY INDUSTRY IS NUMBER 5. CADBURY SAW RECORD PROFITS IN THE MIDST OF THE GREAT RECESSION. AND REESE’S PEANUT BUTTER CUPS LAUNCHED IN 1928, RIGHT BEFORE THE GREAT DEPRESSION- AND THEY ARE STILL THE BEST CANDY OUT THERE BY FAR. THAT’S A FACT.

BARGAIN SHOPPING DURING A RECESSION IS CRUCIAL. AT NUMBER 4, WE HAVE DISCOUNT STORES AND CONSIGNMENT SHOPS. DURING THE GREAT RECESSION IN 2008, DOLLAR TREE STORES HAD A RECORD $4.64 BILLION IN SALES, AND ITS STOCK PRICE SURGED MORE THAN 80 PERCENT. FOR HIGHER QUALITY ITEMS, SHOPPERS ALSO TURN TO THRIFT AND CONSIGNMENT SHOPS FOR DEALS, AND IF YOU ARE LOOKING TO MAKE SOME CASH, THAT’S A GOOD PLACE TO SELL TOO.

COMING IN AT NUMBER 3, REPAIR SERVICES. WHEN YOU’RE CASH STRAPPED, YOU’RE BOUND TO TRY TO FIX THAT BROKEN SCREEN OVER BUYING A BRAND NEW PHONE. FOLKS ALSO WANT TO GET EVERY LAST MILE OUT OF THEIR RIDE WHICH MEANS AUTO SHOPS FARE WELL TOO. AND, INSTEAD OF BIG RENOVATION PROJECTS, HOMEOWNERS WILL GO FOR MINOR REPAIRS, EVEN D-I-Y FIXES. HOPEFULLY YOU KNOW WHAT YOU ARE DOING.

WE’RE PUTTING THE BUDGET TRAVEL INDUSTRY AT NUMBER 2. WHETHER IT’S FOR BUSINESS, OR PLEASURE, PEOPLE WHO STILL NEED TO GET AROUND DURING A RECESSION ARE MORE LIKELY TO GO THE BUDGET AIRLINE ROUTE. EVEN IF THAT MEANS BEING CORRALLED ON A SOUTHWEST FLIGHT OR GETTING NICKEL AND DIMED ON SPIRIT. BUSES AND TRAINS ALSO GET MORE POPULAR. AND CAMPING IS A RECESSION PROOF BUSINESS REPLACING HOTELS WHEN YOU NEED TO GET AWAY.

AND OUR NUMBER 1, WELL IT’S PROBABLY NOT A SHOCKER. A STUDY FROM RESEARCHERS AT THE UNIVERSITY OF BUFFALO FOUND PEOPLE TEND TO DRINK MORE DURING A RECESSION COMPARED TO THE GOOD TIMES. THERE ARE CHANGES IN HABITS THOUGH, IN 2008,(People shopping at liquor store) BEER SALES TOOK A DIVE WHILE HARD LIQUOR SALES WENT UP. THE SAME THING HAPPENED DURING THE RECESSION OF 2001. I GUESS FOLKS ARE TRYING TO GET MORE BANG FOR THE BUCK.

WITH ALL THIS DEPRESSING DOWNTURN TALK, WE’RE JUST TRYING TO MAKE LIMONCELLO OUT OF LEMONS. HOPE IT WORKED. THAT’S YOUR FIVE FOR FRIDAY, I’M SIMONE DEL ROSARIO FOR JUST BUSINESS. SEE YOU NEXT WEEK!