Advertisement

Archive for Saturday, June 6, 2009

Frugality gains favor among consumers

June 6, 2009

Advertisement

— In these recessionary times, people like Seigrid Walker are no longer concerned about keeping up with the Joneses. Now the goal is to fall far behind them.

The 33-year-old lawyer from Mitchellville, Md., once regaled her friends with tales of shopping sprees at Nordstrom and Caribbean vacations with her husband. Now she tells her girlfriends about staying home for pizza night with the kids.

If people know that she can no longer afford to get her hair done every few weeks, who cares?

“If they notice, it’s like, ‘Phew, I’m not the only one,’” Walker said. “There’s a certain camaraderie with everyone understanding that everything is tight.”

The recession has changed the conversation in America. As the era of conspicuous consumption fades along with our 401(k)s, people are clamoring for caps on executive pay and recoiling at the idea of bosses cavorting at expensive spas. At play dates and happy hours, friends are swapping recipes instead of making restaurant reservations. “Coupons” has become a more popular search term than “Britney Spears” on Google.

Instead of feeling self-conscious about spending less, people are flaunting their frugality. Both those who have lost income, such as Walker, and those who simply fear they may become at risk are part of the new discourse.

“Something very deep has changed in the American psyche,” said Dan Ariely, a professor of behavioral economics at Duke. “The recession basically woke us up.”

That change was in painful evidence when luxury retailer Saks reported May sales were down nearly 27 percent from a year ago and Nordstrom said its fell 13 percent. Abercrombie and Fitch, which has been reluctant to lower prices, was down 28 percent. Overall, sales fell 4.6 percent at U.S. chain stores, according to the International Council of Shopping Centers.

According to a recent telephone survey of 1,000 people that Ariely conducted for Bank of America, about 80 percent of those surveyed said they are more conscious of spending now than at the beginning of the year. A Gallup poll in April showed 59 percent of Americans enjoy saving money, compared with 48 percent in April 2001. The percentage of people who said they enjoyed spending money dropped to 37 percent in April from 45 percent in 1991.

Such large numbers have helped normalize a new, more thrifty pattern of consumer behavior, Ariely said. In other words, being cheap has become socially acceptable.

Sarah Morgan said she didn’t mind showing up at the Loudoun Valley (Va.) High School senior prom in her mom’s minivan. The 18-year-old and her friends considered a limo but quickly dismissed the idea once they realized it would cost $45 to $60 a person.

“Some people were like, ‘Oh wow, you came in a van, that’s cool,’” Morgan said. “Everyone is cutting back, and it’s an easier way to get to someplace.”

The same mindset has helped turn consignment sales into a main topic of conversation during Gina Lincicum’s moms club meetings.

Loathe to attend events with paid tickets, they alert one another to free family outings. E-mail chains now share cheap summer recipes for a Crock Pot. So many people have asked Lincicum for her homemade pizza recipe — as much as $20 cheaper than delivery — that she posted it on her blog, Moneywise Mom.

Comments

Starlight 4 years, 10 months ago

What the hell does a delivered pizza cost in N Virginia if you can make one $20 cheaper? Crimony!

0

Commenting has been disabled for this item.