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% 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."
And she's doing just that, but only when she can find another deal. Wilmes and her husband recently bought a Samsung television from Best Buy's Web site for $1,299, about $300 less than she found at other stores. She also got free delivery and another $13 back from ebates.com, which receives commissions from online retailers for directing customers their way.
What's happening now has been building for years. Wal-Mart introduced "everyday 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 menus" made fast food even cheaper.
But until the Great Recession came along, consumers hadn't seen anything yet.
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Those who still have jobs don't want to spend as they once did. There is a new societal pressure to be careful and smart when buying almost anything. From Chicago's Miracle Mile to malls around Orange County, Calif., it was once a status symbol to trot around with armloads of shopping bags with designer names on them. Now, it's considered ostentatious.
Traditionally, manufacturers and retailers lowered prices to clear inventory. Today, they're cutting prices because consumers are demanding it. If it lasts, the ramifications will be wide-ranging.
"There's almost a new morality to spending," Liz Claiborne CEO Bill McComb told an investor conference last month.
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The bargains being offered at the Garden State Plaza in Paramus, N.J., make it seem like the day after Christmas. But it's only a weekday in September. The deals start at 25% off and keep getting better. Neiman Marcus, Forever 21, Ann Taylor, Macy's Gap -- across the retailing spectrum there are promotions.
Retail sales remain sluggish, and more than half of the people surveyed recently by America's Research Group and UBS say 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.
Dave Ratner sees this price chase firsthand. His four-store chain in western Massachusetts, Dave's Soda & Pet City, has never been so focused on promotions and low prices. During the past year, customers stopped buying $50 bags of premium dog food and "special" $10 pet treats. Pet-related Halloween merchandise usually sells well, but he isn't stocking any this year because he doesn't think people will buy it. Instead, he's offering big discounts on cheaper brands of pet food.
"It's killing my profit margins, but if you don't offer specials and lots of promotions, you aren't operating in the current world," he says.
Continued: 'Thankfully, the bargains keep coming'
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