The Great Depression of the 1930s changed consumer behavior for decades among those who experienced the downturn firsthand. Although the vast majority of consumers today have no direct recollection of the Great Depression, most everyone remembers relatives who were frugal into their old age even decades after their economic fortunes improved.
With consumer spending in the United States averaging over two thirds of GDP, figuring out whether consumer behavior will ever return to pre-recession levels is a critical question for economists. The consumer has reliably returned after each of the prior post war recessions, but the current “Great Recession” is much more severe than any downturn since the late 1930s. The longer the recession persists, the more scarred consumers will be over the long run.
Those who follow reports on consumer spending in the United States have seen no shortage of forecasts on this question. It is sometimes interesting to see how our experience compares with that of other countries even though cultural patterns have much to do with consumption vs. savings decisions. ASDA is a British supermarket chain and a subsidiary of Wal-Mart. In the video shown below, ASDA CEO Andy Bond talks about consumer spending and his views of whether consumer behavior is likely to revert to pre-recession levels.
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Disclosure: The author owns shares of Wal-Mart, the parent company of ASDA.