As we all look for signs of a U.S. recession, don't ignore what the consumer with disposable income does when the going gets tough.
A story in this morning's New York Times discusses research that suggests that "pinching pennies on everything from toilet paper to yoga classes" in times of economic stress makes consumers feel better, even if it's not saving that much money.
It quotes Wharton School marketing professor Robert Meyer on "dollar-stretching consumers":
They’re seeing all this news media saying the value of your house has gone down, the value of your portfolio has gone down. Well, none of it is relative to their day-to-day spending. Nevertheless it creates a feeling of poverty, which feels bad. The way they can undo that is their daily savings perks, which make them feel richer.
Yes, these also are not people living paycheck to paycheck. But the next time you're at your daughter's indoor soccer game, ask some of the other parents how they've trimmed household expenses. Rib-eye instead of filet mignon? Kmart bobos instead of Nike Air running shoes?
Is thrift coming back in vogue?
