New frugality emerges

It's chic to be thrifty even as gas prices fall

By Dan Sewell ASSOCIATED PRESS | Monday, December 1, 2008

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Frugality is making a comeback.

Fearful that economic conditions could get worse and stay that way, Americans are showing an enthusiasm for thriftiness not seen in decades.

This behavioral shift isn't simply about spending less. The new frugality emphasizes stretching every dollar. It means bypassing the fashion mall for the discount chain store, buying secondhand clothes and furniture, or trading down to store brands.

There's more business for repairmen and less for salesmen. Consumers are clipping more coupons and swiping their credit cards less.

Not long ago, yoga teacher Gisele Sanders shopped at the Nordstrom Inc.'s in Portland, Ore., and didn't think twice about dropping $30 for a bottle of Chianti to go with dinner. That was before her husband, a real estate agent, began to feel the brunt of slowing home sales.

Now Mrs. Sanders, 53, picks up grocery-store wine at $10 or less per bottle, shops for used clothes and plans to take her mother's advice about turning down the thermostat during winter. "It's been a long time coming," she said. "We were so off the charts before."

That kind of scrimping may be good for stressed family budgets, but it's bad for the nation's overall economy - and that has the potential to reinforce the miserly mood. Yet with home prices, 401(k)s and job stability suffering, such frugality is likely to be more than a fad.

"It is a whole reassessment of values," said Candace Corlett, president of the consulting firm WSL Strategic Retail. "We've just been shopping until we drop, and consuming and buying it all, and replenishing before things wear out. People are learning again to say, 'No, not today.' "

The trend is evident in where cash registers are ringing, and where they are not.

Walmart Stores Inc., BJ's Wholesale Club Inc. and Goodwill Industries International Inc.'s thrift shops are thriving, while Saks Inc. and Abercrombie & Fitch Co. are struggling. Likewise, as casual dining chains such as O'Charley's and Red Lobster see fewer customers, McDonald's is serving more, including people who have given up $4 Starbucks drinks in favor of the fast-food chain's expanding coffee menu. Even Spam has made a comeback.

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