KEY POINTS:
Shoppers are primed to profit from the recession, with commentators expecting consumers to bag big bargains, especially if they haggle.
There are savings to be had in almost all sectors, say experts, except the necessities of petrol and food.
ANZ economist Khoon Goh has predicted savings across the
board but particularly in "durables such as cars, fridges and other whiteware, where sales have fallen particularly sharply".
He said consumers with cash would make the most of the tight economy, with retailers more willing than ever to move on prices.
Those opting for hire purchase could expect longer interest-free periods, but Goh urged them to check the interest rate they would pay when the free period ran out.
And people who didn't mind not having the "very latest in gadgets" could also expect bargains in the electronics sector, with prices of mobile phones and flat-screen TVs falling.
That was certainly the case at the Henderson branch of factory outlet Appliance Shed yesterday, where five LCD TVs, usually selling for more than $1400, were sold for $1 each.
Buyers queued overnight but the store's Mark Campbell said it wasn't a promotional trick to lure more customers, simply "a bit of fun" to remind people they could still afford some discretionary items.
"Every time they pick up the paper, I'm sure the majority of people feel like slitting their wrists," he said.
Stores such as his were thriving because they attracted customers who were feeling the pinch.
"Our stores are getting busier and busier. We are not in the high street, we are not in the malls. Our business model works on low overheads and a really, really small margin so we can pass on good deals to the consumer."
Belinda Allan of Consumer New Zealand said shoppers should make the most of sales but cautioned against spending up large "just because something is on special".
Online shopping could be a good way to save money but Allan warned that although products looked cheaper, shipping costs and currency conversion, if buying from overseas, could negate the savings.
Layby offers and interest-free deals were rife, said Allan, but customers had to check the terms and conditions. With layby, it was important to get a written note of the agreement signed by the retailer.
Negotiating prices was becoming more common and she advised canny consumers to follow the trend. "Especially if you are going to be paying in cash - ask for discount."
But while economists discuss the consumer price index and the price of oil, another indicator also reveals times are tough. You won't find it in economics textbooks, but the Lipstick Index has stood the test of time.
The correlation between a tough economy and stellar lipstick sales dates to World War II and was observed after 9/11, when lipstick sales doubled in the US. The theory is that buying smaller luxury items helps consumers feel better about themselves.
Kiwi makeup sellers have backed Australian reports of "an explosion of bling" boosting sales.
Marianne Welch of Glamorpuss Cosmetics, a boutique in Auckland's Newmarket specialising in premium skincare and makeup products, said sales of lip gloss and mascara were up 10 per cent on last year.
"We are hearing a lot of comments from customers that they consider skincare and makeup to be a necessity, rather than a luxury. They also are saying that, given they are not indulging in bigger ticket items, they deserve a new lip gloss."
Elizabeth Arden and Estee Lauder confirmed the trend, and the Cosmetic Fragrance and Toiletries Association said lipstick sales were up 7.8 per cent on this time last year.
Jeweller Angela Daniel said there were more "impulse purchases" of "sparkly colourful" rings by women wanting to cheer themselves up. And a spokesman for Foodstuffs said alcohol sales, especially bubbly, were up.
THRIFTY SHOPPING
Haggle: Prices can be negotiated now more than ever before. Ask for a discount, don't be sucked in by offers of "rewards points" - their true value is less than 2 per cent.
Buy online: Consumer NZ says buying online can save you money, but calculate the total cost when buying from overseas.
Interest free: Read the fine print and know what rate you will pay once the "free period" is up.
Go second-hand: Stores such as Paper Bag Princess and Recycled Boutique report a roaring trade from people offloading designer clothes.
Use coupons: Don't throw away petrol vouchers from the supermarket and check the back of receipts for savings.Take advice: Visit a budgeting service.
Cut out the middle man: Visit factory outlets for the best deals. Go to www.bargainshopping.co.nz for local stores.
Swap clothes: Make a night of it with your friends and clean out your wardrobe.
Source: Brian Pethybridge, North Shore Budgeting Service