BOSTON (TheStreet) -- American consumers are reordering their spending priorities by doing without, and they're trading down by buying cheaper store brands instead of designer labels. An uncertain job market coupled with a money squeeze on necessities such as food and fuel has them changing their shopping strategies.
There's a lesson in there for investors.
Consumers' newfound penurious attitude is the result of an unemployment rate of an elevated 9.1%, the lack of new jobs, and the high price of gas and rising commodities prices that has resulted in higher food and clothing costs.
Consumers will be making fewer shopping trips and keep them closer to home because of the high price of gas, Standard & Poor's Equity Research Services said in a recent report.Because of that, big discounters, including some supermarket chains and membership-warehouse clubs, particularly those that sell gas, should get a growing share of consumer purchases, as should select convenience and drugstore chains with big footprints. Providers of so-called consumer staples, which are day-to-day items such as household and personal products, and food and beverages, are also looking good right now, since demand remains consistent in any economic environment. Some investors are already reacting to the prospect of these changes in consumer spending. Consumer-staples stocks are up 7% this year and 18.2% over the past 12 months through June 2, while the S&P 500 Index is up 5.3% this year and 22% over 12 months. Within the consumer-staples stock sector, the big gainers this year are tobacco companies, up 18.4%; personal products, up 9.4%; food, up 8.4%; and food and staples retailing, up 5.3%. Here are eight stocks that should weather the current economic conditions in fine form:
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