Dollar S-t-r-e-t-c-h : The Recession Is Teaching Even Affluent Shoppers the Value of Discount Stores

It’s 11 a.m. on a Friday morning, and the sun shines brightly on a champagne-colored BMW, a bronze Jaguar and a green Mercedes-Benz sitting side by side in a crowded parking lot.

Is it the parking lot of a chic Newport Beach restaurant, a Jaguar dealership or an upscale shopping mall? Hardly. It’s the Price Club, a membership discount store known for selling everything from calculators to champagne on the cheap.

Those expensive cars lined up in front of a bargain-hunter’s paradise reveal something about the economy that many polls do not: As the recession drags on, more well-to-do consumers are rethinking the way they shop.

More often, the wealthy are turning to such discount stores as Price Club, Costco Wholesale and Target to squeeze the most from their dollars, just as lower-income people have always done.

Andrea Weinberg of Dana Point is loading groceries into the back of her gold Jaguar at Costco in Laguna Niguel, a membership discount store much like Price Club. Weinberg says shopping at a discount store no longer carries a negative stigma among her neighbors in the exclusive community of Emerald Ridge in Monarch Beach.

“They don’t care anymore,” she says. “I saw my neighbor who lives in a $900,000 house shopping at Target. You see Mercedeses, Jaguars and all kinds of expensive cars parked there.”

Weinberg is one of the converted. She looks to “your Target and those type of discount stores” for her children’s clothing and household staples.

“After the recession, I’ll still shop there,” she says. “You get rebellious. (The recession) teaches you a lesson.”

It’s more than a lesson in finances. Weinberg says her entire attitude toward material goods has changed.

She no longer cares whether her clothes bear a designer name. On this day she’s wearing a generic brand of white canvas tennis shoes she picked up for $5 at Target. In the past, she would have paid four times that amount for a name brand at a department store.

“The recession has really taught us to see the value of things,” she says. “I used to be a real label person. I’m over it.”

She’s also learned to shop smart. She now walks into a store armed with a list to avoid impulse purchases.

She and her husband, Rick, own the Coast Canyon Real Estate and Mortgage Co. in Monarch Beach. Business hasn’t been easy: For the last year, they have been living off their savings.

“The recession has been a learning experience for people in all (income) categories,” she says.

Although her family is by no means hurting financially, Tricia Nichols of Laguna Beach has re-examined her priorities because of the economy.

“We’re spending less, partly because of the recession and partly because we want to take the time to refocus our values,” she says, emptying a shopping cart filled with luggage, popcorn, food and other practical goods into the back of her BMW at the Price Club in San Juan Capistrano.

“I’ve essentially stopped buying clothes,” she says. “I don’t think it’s necessary. It’s just mostly a mind-set. It feels good to be saving money instead of being so materially focused.”

Nichols has gained a new appreciation for those pleasures in life that don’t carry a price tag.

“I’m using the time I spent shopping to enjoy my family and neighbors,” she says. “I find it’s a relief.” The pressure to keep up with the Joneses is off.

Nichols is president of Planned Parenthood in Orange County and San Bernardino, and her husband, Dr. Albert Nichols, is chief executive officer of the Nichols Institute, which performs diagnostic laboratory testing in San Juan Capistrano. Although they maintain a high income and Tricia Nichols doesn’t need to shop at Price Club, she does so “to be a smart person.”

“I saw a box of Godiva chocolates in there,” she says. “Why not buy them here instead of paying full price at (the mall)?”

Mildred Hamby, a widow from San Clemente, has long shopped at Price Club, but now she goes there more often for her groceries. She also scans the newspapers to see which stores are having sales, and she clips coupons.

“The economy has taught me,” she says, lowering groceries into the trunk of her Mercedes. “Heavens, everything has gotten so high, and money is not that easy to come by. A box of cereal is now $3.25. I remember when it was 50 cents a box.”

To Doris Black of Dana Point, shopping at the Price Club is nothing new. She’s been doing it for nine years. The difference is that she no longer shops in regular retail stores.

“I’m trying not to spend as much money when there isn’t as much to spend,” says Black, stepping into her silver Eldorado Cadillac.

“Now I go to (discount) places like T. J. Maxx and Kids ‘R’ Us.”

Her husband makes a “good income” selling insurance, so the Blacks are doing better than many during the recession. Nevertheless, “business has slowed,” she says, and it’s harder for them to maintain their standard of living.

Many shoppers are saying exactly what retailers don’t want to hear in slow times: The recession has prompted them to hold off buying big-ticket items until they see signs of recovery.

“I’ve put off major purchases,” says Dan Ellis of Dana Point, climbing out of his red Corvette and heading for the Price Club entrance.

“We still eat well, and I’m looking to buy new clothes, but I’ve used a lot of my reserve cash because business has been bad,” says Ellis, a real estate business broker.

Robin Duncan of Mission Viejo, a retired commodities trader, says: “I’ve put off really expensive purchases until I see how things are going. I’m staying away from the higher-end stores.

“You have to look more closely where the money goes,” says Duncan, taking the last bites of a Dove Bar in the Costco parking lot before heading off in his green Jaguar.

Robert Price, chief executive officer of Price Club in San Diego, confirms that his customers’ willingness to buy big-ticket items “has been blunted.” Still, Price Club profits are “running even or a little ahead” of usual in Southern California because people are buying more of the smaller items, he says.

To be sure, not everyone has been affected by the recession.

But those well-off people who are cutting costs to survive the recession have a valuable lesson to share with people of all incomes:

“People with money know how to save money,” Weinberg says. “It’s not what you make, it’s what you keep.”