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I came across this Bloomberg article the other day on BNPL and had to share thoughts about it and its data.
According to a recent survey from LendingTree, nearly 1 in 5 Americans have used BNPL services to afford groceries while almost half have used the apps in general. On top of that some 27% use the loans as a bridge to their next paycheck.
To make matters worse, BNPL apps have also become more popular as benefits that were extended during the pandemic, such as food stamps and Medicaid, expire for many beneficiaries.
The notion that the consumer is doing fine because you can point to inflation coming down, spending still going on, wages, excess savings, etc isn’t seeing the forest for the trees.
There are fundamental issues in the underlying base of the consumer and I’ve never met anyone saying the economy is fine when you’re making payments on groceries in installments.
Until next time,
Paul Cerro | Cedar Grove Capital
Personal Twitter: @paulcerro
Fund Twitter: @cedargrovecm
HoldCo Twitter: @cedargrovech
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