Feast During Famine

This post first appeared on Minyanville.

Shoppers are trading in prosciutto and buffalo mozzarella for peanut butter and jelly.

Economic downturns generate at least one kind of plenty: A bountiful supply of news stories about consumers cutting back. Whether it's carpooling, staying in on Saturday nights or visiting Mount Rushmore instead of the Eiffel Tower, there are plenty of ways to stretch that discretionary dollar during hard times.

USA Today reports that Americans are even paring down the grocery bill by sacrificing their arterial integrity: Adam Drewnowski, director of the Center for Public Health Nutrition at the University of Washington, says that strapped shoppers often ditch fruits and vegetables in favor of calorie-packed junk.

By junk, I mean glorious Kraft (KFT) macaroni and cheese and uber-sweet Cap’n Crunch (PEP). It isn't clear if this is because healthier fare is dramatically more expensive, or because comfort foods like Twinkies (IBCIQ) become much more appealing when your dreams of early retirement are rapidly fading away.

With food costs rising 4% in 2007 -- the highest annual rate since 1990 -- and expected to rise 4.5% to 5.5% more in 2008, some shoppers are making like their 18th-century forebears and opting to grow food themselves. Vegetable gardens are back in vogue, and even chicken coops have suddenly reentered the mainstream lexicon.

During good times, few people even bother to make a grocery budget: Food seems so unquestionably essential. Now, all those buy-one-get-one-free specials are starting to seem like a good idea.

According to USA Today’s poll, most consumers are thinning out their monthly food bills by opting for smaller portions, using leftovers and cooking at home; restaurants are definitely feeling the pinch as diners opt for homemade meals rather than greasy fast food. This doesn’t bode well for gimmicky chains like Buffalo Wild Wings (BWLD), Sonic (SONC) and Steak 'n Shake (SNS), which serve up deep-fried cholesterol with a side of mayonnaise. And smaller portions can't bode well for Burger King (BKC): They're still hawking the Triple Whopper, which comes in at a mere 1100 calories.

The pressing question for the country’s economy is whether these trends will last. Consumers cut back during recessions; it’s just what they do. When the economy picks up again, however, the lean times are quickly forgotten, those backyard gardens go fallow and shoppers return to their gluttonous, free-spending ways.

Many argue that this time is different - always a dangerous proposition, to be sure. But with the bursting of the credit bubble, the American public may be turning on consumerism with the same ferocity with which it adopted strip-mall extravagance in the first place.

Without home equity to tap into and credit cards becoming increasingly tough to secure, we may have little choice but to revert back to simpler times - and live within our dwindling means.