- The Washington Times - Thursday, April 30, 2009

Frugality “chic” made it stylish in recent months to ponder adaptive re-use, secondhand stores and fancy food magazines that suddenly feature a ham sandwich or modest comfort food on their covers.

Chic has nothing to do with it anymore.

“Consumer belt-tightening is here for the long haul,” said Michael McCall, a consumer psychologist at Ithaca College in New York.

Recession rumors have become financial meltdowns.

“Months ago, we were in shock. Nobody believed what was happening. So it was a stress-like reaction. Now people are spending less. People are tightening their belts and it is not clear exactly when they will stop tightening and start spending again,” Mr. McCall said.

Prompted by the proverbial pain at the pump and other eye-opening expenditures, Americans hit a wall, he said.

“That pricing honeymoon would not last forever,” Mr. McCall said. “We expect the same thing might be going on with other types of consumer spending. People are settling in to maybe five or 10 years before we expand back to where we once were.”

A Gallup poll released Wednesday found that a third of respondents said spending less is their “new normal.” Three out of 10 said saving more had also become the norm.

“Fifty-one percent of Americans project that they are going to settle into a new, normal pattern relating to either spending or saving,” the survey said. “This finding suggests that the ‘new frugality’ that has been so talked about may indeed have a chance of settling in as a new cultural norm.”

“Actual behaviors” mean more than good intentions, the study said, particularly if the economy improves.

“Retailers may need to plan on more measured consumer expenditures,” said Gallup analyst Frank M. Newport.

Indeed, a recent Pew Research Center survey found that many Americans are now willing to do without the former must-haves of modern life - including microwaves, flat-screen TVs, dishwashers and iPods. These are now considered luxuries.

“Recession-era re-evaluations are all the more striking because the public’s luxury-versus-necessity perceptual boundaries had been moving in the other direction for the previous decade,” the survey said.

Now, 57 percent of Americans are shopping at discount stores. Another 28 percent have cut back on alcohol and cigarettes.

“Some industries will be hit a lot harder than others. Basic necessities will be OK. The hospitality industry may be challenged and clearly the auto industry is challenged. People are willing to keep their existing cars and push them a little farther,” Mr. McCall said.

“Those industries that emerge from these difficult times will probably consolidate,” he added. “Restaurants and department stores may merge and will likely emerge from this crisis in a very different form.”

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