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Cutting down, but not out, on vices during tough times
Monday, March 16, 2009

In tough times, people still need their nicotine, legalized numbers and a nip of alcohol now and again.

The economic downturn simply has folks scaling back a bit -- in quality or quantity -- on the guilty pleasures of smoking, drinking and gambling.

"I always go for the three-pack deal and always go for the specials," said Stephanie Lipford, 24, of West Deer, recently on a smoke break outside the Everest Institute, Downtown. She has cut her four- to five-pack-a-week habit to three packs since the beginning of the year.

State cigarette and malt beverage tax collections are down while liquor sale tax collections are up, said Stephanie Weyant, the Pennsylvania Department of Revenue's spokeswoman.

Cigarette tax collections were $442 million, down 0.5 percent; malt beverage tax collections were $15 million, down 2.4 percent; and liquor sale tax collections were $147 million, up 4.1 percent for the period July 2008 through January 2009, compared with the previous fiscal year to date.

State lottery sales, July 2008 through February 2009, were $2.04 billion, up 1 percent compared with the same period in the previous fiscal year, she said.

"We're experiencing a very modest increase in ticket sales," Ms. Weyant said. "If the economy were stronger, and we weren't in a recession, we estimate our lottery sales would be up 4 to 5 percent."

Revenue for Pennsylvania's six casinos in February was $125.9 million, up 14.9 percent compared with February 2008, according to the Pennsylvania State Gaming Board.

"If you think about what purpose vices serve, they are to give us immediate pleasure, give us a bit of an escape and they're coping mechanisms," said Mary Jo Loughran, assistant professor of psychology at Chatham University.

With a flagging economy, record joblessness, threats of more joblessness, record home foreclosures and threats of even more home foreclosures, many are tense, uncertain about the future and trying to cope.

People turn to their vices more as stress increases.

"These are immediate and within people's daily grasp and they're socially sanctioned," Dr. Loughran said.

People tend to use their vices more to manage pain.

"Most people who use a vice don't do it to feel good," said David Palmiter, a Marywood University psychology professor and the American Psychological Association's public education coordinator. "They do it to stop feeling bad."

The economy's uncertain state also may help people rationalize indulging in vices.

"I don't get to go to the Caribbean this year, but I can still afford my $10 bottle of wine," Dr. Loughran said.

Tom Bower, owner of Chocolate & Chances, Downtown, says lottery and chocolate sales are down a bit, but cigarette sales, which make up a very small portion of his business, are better than ever.

"When the economy [downturn] started, everybody that quit smoking started again," he said, jokingly. "A lot of people give up candy for Lent and a lot of people give up lottery for Lent, but nobody quits smoking for Lent."

In general, lottery sales were good for February because the Powerball jackpot reached $174.4 million.

"When it hits $100 million, that's when the office pools kick in and everybody plays, especially now because of the economy," Mr. Bower said.

At Liberty News, Downtown, lottery sales so far this year are about the same as they were last year at this time. Cigarette sales are holding steady, as well, said store co-owner Srinivasa Rao Chigurupati. About 90 percent of his customers are regulars.

"Because of the economy, people don't have money compared to last year, but they still buy premium [cigarettes] not so much the generic," he said.

Charles Norton, portfolio manager of USA Mutuals' Vice Fund, which globally invests in alcohol, tobacco, gaming, aerospace and defense industries, said globally, the economic downtown is having virtually no impact on tobacco companies.

"People smoke and drink around the world in good times and bad," said Mr. Norton, based in Dallas.

Overall, the U.S. gaming market is struggling, but Pennsylvania, one of the smaller gaming markets in the country, is doing pretty well, he said.

However, in the beverages sector, premium and super premium liquors and beers aren't selling as well as less expensive brands.

"A consumer is more likely to have a Miller Lite than a Heineken or Corona," Mr. Norton said. "That's the exactly the opposite of what we've seen in years prior."

This is proving true locally, too. Higher end brews aren't selling as well at McBroom Beer Store, a micro beer and craft beer store in Regent Square, said daytime manager Ashley Phillis.

"We're selling a lot of domestics, but there's no real slouch in our sales," he said.

Steve Klein, owner of Save-Mor Beer & Pop Warehouse in Squirrel Hill, has seen the same trend, with people buying less-expensive beer and cigarettes.

"What we've seen is growth in the segment called 'roll your own,' " he said.

Instead of buying brand name cigarettes, some are buying generic brands and some are buying bags of tobacco, rolling papers and rolling their own cigarettes.

Stressful economic times also can make people seek relief in places they hadn't looked before.

Marcella Razo isn't a regular lottery player, but recently she decided to buy a Pick Four lottery ticket while on her lunch break in Market Square.

"I'm hoping. I had $2 left and thought, 'why not?' " said Ms. Razo, 53, of Conway. "I'm employed, but you just don't know what's going to happen."

L.A. Johnson can be reached at ljohnson@post-gazette.com or 412-263-3903.
First published on March 16, 2009 at 12:00 am