(Editor's note: Updates to reflect today's earnings releases from Kohl's and Nordstrom.)
BOSTON ( TheStreet Ratings) -- The term "trade down" became a familiar phrase in the investment lexicon after the credit crisis struck the U.S. in 2008.
Trade down, in reference to the retail industry, refers to consumers choosing lower-priced, discounted goods, as compared with higher-end items. Americans, hobbled by surging unemployment, high gasoline prices, investment losses and depressed home prices, were forced to cut back.
Teens who usually assembled a wardrobe at Abercrombie & Fitch (ANF) were searching for back-to-school clothes at Aeropostale (ARO). Their parents, who might have been used to dressing up at J.Crew (JCG) and The Gap's (GPS) Banana Republic were heading to TJMaxx (TJX) or The Gap's Old Navy to save a few bucks. Starbucks (SBUX) frappucinos and lattes weren't selling as well, as many stopped splurging, opting for the java jolt from their -- gasp -- household coffee maker.
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