A new survey by Booz & Company confirms that a “new frugality,” characterized by a strong preference for value has become the dominant mind-set among consumers and businesses in the United States.  Born out of a prolonged recession that has left an unemployment rate north of 10% and an “under-employed” rate approaching twice that number, this trend is not likely to change no matter what the pace of economic recovery.

In short, the Great Recession has forced consumers – and businesses – to shift their behaviors, and there is surprisingly little difference in the expenditure reductions across demographic segments.  So if business spending is destined to remain soft during a prolonged recovery, and consumer behavior has changed in perhaps permanent ways, waiting for a return to a pre-recession mind-set is not a productive strategy. Instead, we need to adapt to the new realities of frugal behavior and spending.

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