There has never been a better time to be a consumer. According to many reports including one by the Associated Press today, America is on sale in a big way."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."
Have you been to a Costco (Nasdaq:COST) lately? Having just returned from my local Costco, I can say " I've seen everything from cameras to watches to DVDs to clothing at prices I haven't seen for many years". It's downright deflationary!
"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 (NYSE:TIF) engagements rings -- are now. The two biggest purchases most people make -- homes and new cars -- are selling at steep price reductions." And the Associated Press isn't exaggerating.
In Salem, Oregon beautiful homes with spectacular views of the Cascade Mountains and the Willamette River are selling for less than $100-per-square-foot. In Ventura County California we've seen homes that near the ocean that were selling for $1.5 million just a year ago now "on sale" for $850,000, and the prices just keep dropping.
"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."
And the "new normal" on prices of just about everything might even have further to fall. This is one of the reasons that Consumer Confidence is dropping and unemployment keeps rising. The AP article tells it like it really is all across the USA.
"What's happening now has been building for years. Wal-Mart Stores Inc. (NYSE:WMT) introduced "every-day low prices" many years ago. Amazon.com (Nasdaq:AMZN) 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.
