A year ago, financially weary consumers were just getting accustomed to living with less. Now it appears they are growing more comfortable with their new-found thriftiness — and more resolute in their convictions to put the brakes on certain types of spending.

Nine out of 10 shoppers say they can live without indulgences like luxury handbags, high-end cosmetics and fine dining – things they began weaning off a year ago. They’re also willing to bid adieu to non-essentials like maid services, facials and satellite radio.

There is a handful of items that today’s consumer refuses to live without —but it’s a short list relative to what they’re willing to sacrifice. They want Internet service and basic cable or satellite TV. Also on the list of “must-haves” are basic cell phone service and occasional trips to discount stores like Walmart or Target to shop for apparel.

These findings are based on exclusive consumer research conducted for STORES by BIGresearch to determine what shoppers consider to be untouchable — suggesting they cannot live without it — and what they perceive to be expendable. The study indicates that consumers continue to assess purchasing decisions through the lens of affordability and appear even more determined to give up the “extras” than they were 12 months earlier.


“The media are doing their best to convince Americans that the economic tides are turning — especially since the numbers on Christmas selling were mostly upbeat,” says Phil Rist, executive vice president, strategic initiatives for BIGresearch. “Shoppers may have found a way to put gifts under the tree, but looking at the data, you get the distinct feeling that retailers will have to wait a while longer before shoppers return to their free-spending ways – if they ever do.”

The U.S. economy is showing signs of improvement, yet most economists remain reluctant to celebrate. They insist the recovery will be slow and painful – a side-effect brought on by debt-strapped consumers and concerns surrounding unemployment, housing and the availability of credit. Until shoppers’ attitudes about the economy brighten, the retail industry is likely to endure continued challenges.

The research bears this out. Seventy percent of the nearly 6,100 adults surveyed say they’ve cut back on more than three-quarters of the products and services alluded to in the survey – an increase of 9 percent from 2008. Eating out and springing for movie and/or theater tickets are among the areas where consumers say they’ve been most aggressive about reining in spending.

In 2008, having a maid/cleaning service ranked fifth on the list of “expendables”; this year it ranks second. Fine dining is also deemed slightly more expendable by consumers than it was 12 months ago, moving up one spot on the 2009 list.

“Over the course of the last year, consumers learned to live without and a lot of them now have a sense of pride about the steps they’ve taken to cut back – including cleaning their houses, finding drug store cosmetics that deliver results or becoming a better cook,” Rist says. “Whether or not this is a trend that continues once economic good times return is difficult to predict. But right now there’s no question that consumers are a more frugal breed than they were a few years ago.”