NEW YORK — Coffee drinkers who swore off frivolous spending during the recession are lining up again for their $4 caffeine fix. Starbucks’ net income nearly doubled and revenue rose 17 percent in the most recent quarter compared with a year earlier, as more Americans allowed themselves a small treat.
After seeing their retirement funds and home equity shrink severely, consumers tightened their belts in a shift some economists dubbed the New Frugality. But affordable luxury goods such as gourmet coffee, lingerie and high-end skin cream have enjoyed a comeback since the stock market began to rally in August.
“People didn’t feel good about having little indulgences” in recent years, says David Palmer, an analyst with UBS Investment Research. “The Suze Orman-type talk shows were telling you to kick your Starbucks habit.”
Now, he says, austerity fatigue may be setting in. The Associated Press
