Frugal Consumers Could Stay that Way

There’s no surprise in the results of an analysis by Rabobank of the consumer food economy: people worldwide have abruptly changed their spending patterns and are increasingly looking for bargains and avoiding extravagance.

Interestingly, though, Rabobanks, a Dutch agricultural lender, says that even after the recession is over, people might decide to stick with their new frugality. The “180-degree turn” away from pricey goods and pricey stores “could prevail beyond our current economic downturn,” said Rabobank Vice President Stephen Rennekleiv.

The bank’s analysis concludes that consumers are buying cheaper cuts of meat and poultry, more private label brands, fewer meals in sit-down restaurants and more meals in fast-food outlets. All those trends will deepen in 2009, Rabobank said.

And some other trends could begin in the coming year. For instance, so far, premium liquor is still doing OK, but merchants are discounting it heavily, showing that there is price sensitivity. The next step for consumers will be to trade down.