Telling Signs-of-the-Times: In grocery stores, “No-Name” sales are up 2% and now represent 22% of total sales. Some full priced stores now offer consignment sections, an unheard of practice a couple years back.
Layaway sales are back in vogue at Toys-R-Us and jewelers alike. Layaways are a depression era phenomenon that all but died with the mass marketing of credit cards.
Old Stigmas Become New Badge of Honor
Frugality is the new “badge of honor” says the Yahoo!Finance report In a tough economy, old stigmas fall away
The Goodwill store in this middle-class New York suburb is buzzing on a recent weekend afternoon. A steady flow of shoppers comb through racks filled with second-hand clothes, shoes, blankets and dishes.
A few years ago, opening a Goodwill store here wouldn’t have made sense. Paramus is one of the biggest ZIP codes in the country for retail sales. Shoppers have their pick of hundreds of respected names like Macy’s and Lord &Taylor; along this busy highway strip.
But in the wake of the Great Recession, the stigma attached to certain consumer behavior has fallen away. What some people once thought of as lowbrow, they now accept — even consider a frugal badge of honor.
At the supermarket, shoppers are buying more store-labeled products, like no-name detergents and cereal, and not returning to national brands.
And in a telling trend, Americans are turning to layaway more often when they buy expensive items such as engagement rings and iPads. The wealthy are also using layaway more often, a drastic change from the past.
“The old stigmas are the new realities,” says Emanuel Weintraub, a New York-based retail consultant. “Now, people don’t have a problem saying, ‘I can’t afford it.’ It’s a sign of strength.”
Two years ago, having second-hand clothes in the same store that sells regular-priced goods might have driven well-heeled shoppers away. Today, the concept works. The new consignment area, called My Secret Closet, has brought in new customers. Shoppers browse both the retail and consignment areas without hesitation.
“We are seeing a permanent change in how people shop, and we have to respond to that,” says Tom Patrolia, who has owned the store for 24 years.
The growth in layaway also reflects Americans’ new willingness to set aside old shopping stigmas. Layaway, which lets shoppers pay over time while the store holds the item, had its roots in the Great Depression. It became passe in the past two decades with the rise of credit cards.
Attitudes – Bernanke’s Biggest, Most Futile Fight
I have been talking about Frugality for over two years. In case you missed it, please consider Please consider Teenagers Scared Over Plight of their Parents; Attitudes – Bernanke’s Biggest, Most Futile Fight
That post contains an email from “Nancy Drew” about her daughters, aged 15 and 17 with their friends scared half-to-death about their parents’ financial woes.
Flashback June 25, 2008: Peak Credit
Lessons Of The Great Depression Forgotten
The lessons of their great grandfathers who lived in the great depression era were forgotten. Over time, everyone learned to ignore the dangers of debt, risk, and leverage. Belief in the Fed and the government to bail out any problem are ingrained. Bank failures are distant memories.
Peak credit has been reached. That final wave of consumer recklessness created the exact conditions required for its own destruction. The housing bubble orgy was the last hurrah. It is not coming back and there will be no bigger bubble to replace it. Consumers and banks have both been burnt, and attitudes have changed.
Children whose parents are being destroyed by debt now, will keep those memories for a long time.
For more on attitudes please see:
- Changing Social Attitudes About Debt – February 25, 2008
- Moral Obligations Of Walking Away – February 7, 2008
- Attitudes Lead, The CPI Lags – March 19th, 2008
- A New Phenomenon: Haggling Over Prices – March 23 2008
- Cool to Be Frugal – April 24, 2008
- The Future Is Frugality – August 10, 2008
- The Age Of Frugality – October 19, 2008
This is what I said on June 30, 2010:
Every place you look, be it housing, education, or public unions, attitudes towards debt, lending, and the role of government are changing. It is precisely those changing social attitudes why Bernanke is losing and will lose the battle against deflation.
The sad irony is Japan has proven it is a stupid battle to be fighting in the first place.
Those fretting over base money supply and foolishly screaming hyperinflation (or even inflation), simply do not understand the dynamics of debt deflation, nor do they understand how small the increase in base money is compared to debt that will be written off, nor do they understand the role of changing social attitudes towards spending.
Attitudes Still Rule
QEII did not change a thing, except to encourage more short-term speculation. Long-term, attitudes still rule, and “Telling Signs-of-the-Times” are all you need to know about the direction of attitudes.
Talk of hyperinflation or even strong inflation is complete nonsense with this backdrop in attitudes.
Mike “Mish” Shedlock
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