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This isn't your grandmother's recession

By KRISTI L. GUSTAFSON, Staff writer
First published in print: Sunday, January 4, 2009
So you've reduced your stops at Starbucks to once a day, put off buying a new car and even canceled that cruise to the Bahamas. At least you had those things to cut back on.
     
"For the past 20 or so years, we have been on a consumption kick that is out of proportion with anything we've had in history," says Scott Spiker, CEO of First Command Financial Services in Fort Worth, Texas. "It's almost an opiate to which our society is addicted."

When Americans feel financial pressure, they scale back, eliminating not just big-ticket items like cars and homes but things as diverse as morning coffee, unnecessary clothing and high-end meats on the dinner table.

History shows luxuries are the first to go, says Adrian Masters, an associate professor of economics at the University at Albany.

In early December, high-ticket-price purchases posted a 34.5 percent drop from the same time period last year, according to MasterCard's SpendingPulse unit. The division estimates total retail sales across all forms of payment, including cash and checks. This is the greatest drop seen in this sector since tracking began in 2002.

In November, Seattle-based Starbucks said same-store sales in the U.S., or sales at locations open at least a year, dropped 8 percent during the company's fiscal fourth quarter as fewer customers came into the stores.

According to food marketing expert Phil Lempert, people are eating out less and supermarket sales are up nationwide.

"Instead of taking their kids to McDonald's for chicken McNuggets, people are choosing to buy Banquet frozen nuggets at the grocery store and get four times as much for the same price," he said.

According to a study conducted in October by an independent research group for ConAgra Foods, nearly one-quarter of employed Americans are bringing their lunches to work more often this year than they were last year, and 57 percent said given recent concerns about the economy, they are more inclined to do so. In addition, two-thirds of the 1,000 Americans surveyed said the economy has them rethinking their day-to-day food purchases.

During the Depression, silk stockings were a hot and highly desired commodity people gave up, recalls Lillian Yonally, 86.

A resident of the Beltrone Living Center in Colonie, Yonally says that during the Depression, people watched what they ate and made new outfits from old clothes. She remembers her childhood friends wearing "repurposed" clothing.

"Their mothers would take their fathers' coat and make it smaller," Yonally says. "There was time to do things like that and not money to buy new ones."

While today's working mothers aren't likely to start ripping apart sport coats, they are likely to take a pair of shoes to a cobbler for new heels, or have the zipper repaired on an old purse, according to area shoe repairmen, who have seen increased business in recent months.

Vacations were a rarity during the '30s, Yonally says. If anything, people took day trips rather than going anywhere that required an airline ticket or passport. Now, annual vacations — however brief — are as common as a family having more than one car..........................http://timesunion.com/AspStories/story.asp?storyID=756406