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Consumers' new thriftiness may linger

NEW YORK — Adrienne Radtke plans to keep riding her bike to work even if gas prices drop. Steve Pizzini got rid of his Cadillac Escalade in favor of a 16-year-old Acura and doesn't expect to have another gas-guzzler.

"I had a paradigm shift," said Pizzini, a financial analyst. "I spent the money on a nice car. But to me, it's not worth it. I don't think I will go that route again."

Every economic downturn changes shoppers in some way. But this time, experts say the new behavior — fueled by higher gas and food prices, tightening credit and a slumping housing market — are the most dramatic and widespread that they have seen since the mid-1970s.

So retailers, marketers and investors are all trying to figure out which habits shoppers will keep and which they drop when the economy recovers. Will shoppers return to department stores or keep looking for labels at TJ Maxx?

"We are looking at stuff that reminds me of the 1970s," said Patricia Edwards of investment manager Wentworth Hauser and Violich. "Americans have seen a huge amount of their balance sheet evaporate. The effects will be more lingering."

According to a survey released recently by market research company Nielsen Co., which tracks consumer habits, about two-thirds, or 63 percent, of consumers are cutting spending because of rising gas prices, up 18 percentage points from a year ago.

The study queried 50,000 consumers by e-mail during the first week of June.

The widening gap between discounters and mall-based apparel sellers was evident in monthly retail sales figures released last week. The International Council of Shopping Centers-UBS tally of 38 stores found that same-store sales at discounters rose 5.1 percent in June and 9 percent at wholesale clubs.

Discount giant Wal-Mart Stores Inc. posted a robust 5.8 percent, its best June performance since 2002.

At department stores, though, same-store sales — or those at stores opened at least a year — dropped 4.1 percent. Andrea Thomas, executive vice president of private brands at Wal-Mart, thinks that many shoppers pleasantly surprised by big box store quality will stick with them after the economy improves, which may pose a problem for name brands and retailers.

Some may forgo buying altogether. At the Alexandria Shoe Repair and Leather Service in Virginia, sales have increased 18 percent since February.

"I am seeing a younger crowd who lives in the disposable world," said owner Barbara Steube. "They are learning an economics lesson. They will see the benefit of the savings and how much money they walk away with when they fix their shoes."

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