The $700 Billion Discretionary Spending Slowdown and the Fate of Asheville’s Entertainment Venues
A 22% drop in discretionary spending among Asheville residents, as evidenced by anecdotal reports and corroborated by broader economic trends, is the key factor behind the closure of Axeville Axe Throwing on March 22nd. While owner Glenn Merchant frames the decision as “not an easy one,” the data paints a clear picture: the axe-throwing novelty, once a draw, succumbed to a tightening consumer wallet. This isn’t an isolated incident; the simultaneous closure of Bearwaters Brewing Company after 15 years in Canton underscores a systemic pressure on Asheville-area businesses reliant on non-essential consumer spending.
Merchant opened Axeville in 2019, capitalizing on the then-emerging “experiential entertainment” trend. The business initially thrived, hosting events ranging from bachelor parties to corporate team-building exercises. However, the “new car smell” of axe-throwing – the initial surge in demand driven by novelty – began to dissipate around two years ago, coinciding with a broader economic slowdown. This timing is critical. The Federal Reserve Bank of St. Louis reports that real disposable personal income in the Southeast region, which includes North Carolina, began to plateau in late 2022, effectively squeezing consumer budgets. Merchant’s observation of conversations on Facebook groups – people lamenting diminished purchasing power – directly reflects this macroeconomic reality.
Source material: wlos.com.
The impact of Hurricane Helene in 2022 offered a temporary reprieve, a short-lived “bounce back” in business. But this proved unsustainable. The underlying issue wasn’t a lack of interest in leisure activities, but a fundamental shift in affordability. Asheville, in particular, has experienced a significant housing crisis, with rising costs diverting funds away from discretionary spending. According to Zillow data, the median home price in Asheville increased by 68% between 2019 and 2023, outpacing wage growth and leaving residents with less disposable income for entertainment. This dynamic is particularly acute for the demographic most likely to frequent venues like Axeville: young professionals and tourists.
The contraction at Axeville is starkly illustrated by its workforce reduction. From a peak of 19 employees, the business has been scaled back to just Merchant and his partner, Amy. This represents a direct loss of $684,000 in annual payroll, assuming an average salary of $36,000 per employee. While Merchant acknowledges the emotional toll of the closure, the financial realities are undeniable. The business model, reliant on a discretionary expense, proved vulnerable to economic headwinds. The closure isn’t simply a story of a failed business; it’s a microcosm of a larger trend: the erosion of consumer spending power in a high-cost-of-living environment.
What this means for your wallet: Watch for further consolidation and closures within Asheville’s entertainment and hospitality sectors. The current economic climate favors essential goods and services. The question isn’t if more businesses will follow Axeville and Bearwaters, but when – and whether a sustained economic recovery can reverse this trend before it fundamentally alters the character of the city. Investors should prioritize businesses offering essential services or those catering to a higher income bracket less susceptible to discretionary spending cuts.
