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…in these retail times, flat is the new up…

More than just 401(k)s are changing with the economy. Many shoppers are changing the way they purchase groceries, eating out less and coupon clipping.

According to the retail firm Precima, 48 percent of people who said they were saving money on gas are now spending that same money on groceries.

At the P & G IGA Market in Killbuck the store’s customer base is declining even as people purchase more groceries.

Manager Larry Frenette blames the larger national chains for declining sales at local grocers.

“The big box stores have hurt the smaller retailer. That’s been going on for the last few years,” Frenette said.

But the reason customers are turning to the big box store is the belief they can get a better deal and save a few dollars, Frenette said.

Sales may be plunging in everything from cars to clothing, but people still need to eat. And that means grocery stores are a relative bright spot in this recession.

They’re helped by customers who have cut back on dining out and are doing more in the kitchen. Yet even supermarkets aren’t immune to the economy as bargain-minded consumers switch stores, opt for cheaper products and even change how they pay–with some shoppers turning to gift cards.

In general, sales at supermarkets are flat, said Jeff Green of Mill Valley-based Jeff Green Partners, a retail feasibility consultant.

“But in these retail times, flat is the new up,” he said. “Flat is great.”

Safeway Inc., which owns Vons, reported a 3.9% increase in sales during the third quarter of 2008, compared with the same period a year earlier. Many other grocery stores like Save Mart are privately owned and do not report their sales.

In contrast, other retailers reported grim tidings. For instance, third-quarter sales at Home Depot fell 6%, General Motors Corp.’s sales dropped 11% and Gottschalks fell 13%.

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