Skip to Content

Post-recession shopping: No more brown bags, but more store brands

Text SizeAAA

Filed under: Economy, Macy's

More

As soon as the recession is over, we'll stop brown-bagging lunch, but we'll keep cooking supermarket-brand food at home. In other words: Most of this talk about frugality being the new normal, retailers say, is just talk.

A survey of retail professionals finds that Americans will go back to their free-spending ways once they think the recession is over, except in those areas where they were already trimming back during the good times. The recession sped up some psychological changes for shoppers that were already under way, such as a new love for store brands and discount shopping, according to the survey, conducted by Dechert-Hampe & Co., a consulting firm for consumer goods manufacturers and retailers.

But behavior changes that were just a reaction to the recession, such as cutting back on shopping trips and dining out, will fade away as soon as consumers feel good about the economy again, said the study's authors, discussing the findings in a panel sponosred by online-industry forum RetailWire. "The American consumer in particular is not good at doing with less of anything, " said Ray Jones, Dechert-Hampe's managing director. "We're not very good at being frugal, like the Greatest Generation."

Retailers, manufacturers, and vendors said overwhelmingly that not all changes they've seen in shopping behavior this recession will endure. More than half thought that sticking to a budget would be a passing fad, while just under half think it's a longterm consumer trend. But most lifestyle adjustments seem more likely to be short-term fads; more than two thirds thought Americans would start dining out more, buying more new clothes, vacationing further from home, and buying American-made products. The findings, Jones said, echo the group's earlier consumer surveys.

A majority of respondents also said that money-saving adjustments made by consumers during the recession will turn out to be fads: buying smaller packages, bringing lunch to work, and trading down to cheaper brands. But some behavioral changes accelerated during the recession, like using store-loyalty cards, buying in-house brands, and using shopping lists. "In two years, we maybe moved five years down that path," said Jones.

The particularly strong growth of store brands during this recession has changed the shoppers' view of value, said Ben Ball, senior vice president of Dechert-Hampe. "This is one of the areas where the recession has definitely bent the curve," he said.

And store brands' staying power jibes with the fading popularity of trading down to cheaper brands, which is "more related to circumstances," said D'Anna Hawthorne, strategy director of Atlanta-based strategic retail-consulting firm MillerZell. "Buying store brands today ... is more of a matter of choice."

Many stores have put in great effort, improving their store brands to compete with name-brand products, said Hawthorne, who singled out Publix Super Markets (PUSH) and Macy's Inc. (M). Ball named Trader Joe's supermarkets and Gap Inc.'s (GPS) Old Navy division as two strong private-label players.

But when will the brown-bagging and scrimping stop? That's where the merchants and the shoppers split. Most respondents in the Dechert-Hampe survey say the recession is easing; 65.8 percent think it will end in the next 12 months, while 2.9 percent think it's already over. They're far more optimistic than consumers, said Jones, noting the latest reading of Michigan Consumer Confidence Index was down.

So we should anticipate more recession-chic marketing and budget-friendly advertising for a while, said Hawthorne.
"I guess it will still be relevant six months from now," she said. "We have always talked about how to get the better deal. I think it will continue to be part of the dialogue."

Merchants will have to take a very careful read on shoppers to navigate their way out of this recession, Ball said: "Watch your traffic and, more importantly, watch your transaction size. When your transaction size starts growing, that's when people are feeling better again."

Reader Comments (Page 1 of 1)

Add your comments

Please keep your comments relevant to this blog entry. Email addresses are never displayed, but they are required to confirm your comments.

When you enter your name and email address, you'll be sent a link to confirm your comment, and a password. To leave another comment, just use that password.

To create a live link, simply type the URL (including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted — no need to use <p> or <br /> tags.

Interest Rates

5/1 ARM4.06%APR: 3.75%
30 Yr.
Fixed Mort.
5.03%APR: 5.16%
$30K
HELOC
8.00%APR: 0.00%
30 Mo
New Car Loan
6.77%APR: 0.00%
1 Yr. CD1.57%APR: 1.58%
DailyFinance Writers
Melly Alazraki Melly Alazraki Financial writer and analyst
James Altucher James Altucher Financial columnist
Jeff Bercovici Jeff Bercovici Media columnist
Jonathan Berr Jonathan Berr Financial writer and media columnist
Mercedes Cardona Mercedes Cardona Retail reporter
Tim Catts Tim Catts Financial writer
Peter Cohan Peter Cohan Author, venture capitalist and financial writer
Carrie Coolidge Carrie Coolidge Financial writer
Lita Epstein Lita Epstein Financial writer
Sam Gustin Sam Gustin Technology Writer
Nikhil Hutheesing Nikhil Hutheesing Tech and investing editor
Joseph Lazzaro Joseph Lazzaro Markets and economics writer
Latif Lewis Michelle Leder Financial Columnist
Latif Lewis Latif Lewis Business news editor and management columnist
Anthony Massucci Anthony Massucci Senior writer and tech columnist
Doug McIntyre Doug McIntyre Business and investing news writer and editor
Michael Mercurio Michael Mercurio Managing Editor
Todd Pruzan Todd Pruzan Features editor
Michael Rainey Michael Rainey Editor and economics writer
Alex Salkever Alex Salkever Senior technology writer
David Schepp David Schepp Business News reporter
Matthew Scott Matthew Scott Investing reporter and editor
Dan Solin Daniel R. Solin Author, investment advisor and retirement expert
Amey Stone Amey Stone Executive editor
Bruce Watson Mark Svenvold Columnist, renewable energy
Russel Turk, M.D. Russell Turk, M.D. Healthcare policy columnist
Bruce Watson Bruce Watson Features Writer
my portfolios

Find out why more people track their portfolios on AOL Money & Finance than anywhere else.

Create a New Portfolio My Portfolios

Daily Finance Partners

More from the Weblogs Network