NEW YORK — There has never been a better time to be a consumer. America is on sale.
The Great Recession has caused massive job losses and hardship for millions, but it has also fostered a shoppers’ paradise. Anyone who still has the means to spend can find unheard of deals.
Prices on everything from clothes to coffee to cat food are dropping, some faster than they have in half a century. Items rarely discounted — like Tiffany engagement rings — are now. The two biggest purchases most people make — homes and new cars — are selling at steep price reductions.
“This is the new normal,” says Donald Keprta, president of Dominick’s, a supermarket chain in the Midwest, which just cut prices by as much as 30 percent on thousands of items. “We aren’t going back.”
Consumers like Karen Wilmes, a mother of two in Hopkinton, R.I., relish the steals. During a recent trip to Shaw’s Supermarkets, she bought a basketful of goods, including Eggo waffles, Kleenex tissues and Betty Crocker cake mix. The retail price: $63.89. Wilmes paid $7.31 by buying items on sale and using coupons.
“The deals out there are unbelievable,” says Wilmes, 36, who writes the Frugal Rhode Island Mama blog, which tracks local and national bargains. “We can put the money I save toward something else.”
What’s happening now has been building for years. Wal-Mart Stores Inc. introduced “every-day low prices” many years ago. Amazon.com redefined the idea of bargain prices during the late 1990s when it helped introduce online shopping. After the 2001 recession, automakers introduced zero-percent financing to boost sales. McDonald’s “Dollar Meals” made fast food even cheaper.
But until the Great Recession came along, consumers hadn’t seen anything yet.
Last fall’s financial meltdown triggered a plunge in stock prices and home values and wiped out 11 percent — $6.6 trillion — of household wealth in six months. It also put an end to easy credit, which had fueled the consumption that powered the economy for most of the decade.
“There’s almost a new morality to spending,” Liz Claiborne Inc. CEO Bill McComb told an investor conference last month.
Retail sales remain sluggish, and more than half of the people surveyed recently by America’s Research Group and UBS said they are shopping less. But when they do shop, most go to stores with lower prices or wait for sales before returning to their favorite retailer, according to the survey.
Great buys are not exclusive to retailing. The government’s Cash for Clunkers program is over, but more than half of car buyers still get a cash rebate, according to J.D. Power &Associates.
Hotel rooms cost travelers nearly 20 percent less, on average, than last year, the biggest decline since Smith Travel Research began collecting data in 1987.
Home prices have dropped 30 percent, on average, from the peak in 2006. In some markets, they’re down more than 50 percent. Homes in parts of Detroit are cheaper than a new car.
Those with goods and services to sell hope that the discounting bolsters sales, which would help get the economy chugging along again. Consumer spending accounts for 70 percent of the economy.
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