Companies move to cheap chic as baby boomers curb spending

Most analysts expected that, as baby boomers approached retirement, they would spend less and save more. However, no one could have predicted how quickly this would occur. Thanks to the economic downturn, the Woodstock generation has put the brakes on expenditures and companies are trying to react quickly enough to stay in business.

Some think it's a short-term temporary shift in buying habits for baby boomers. Most, however, seem to argue that it's a permanent long-term change that came on earlier then expected as losses in home equity and retirement portfolios forced major spending changes. As they near the end of their working lives, many boomers suddenly must adapt to tighter budgets and reduced expectations. Previously, this generation reached their spending peak at 54, as opposed to previous generations that peaked at 47; these extra seven years translated into huge revenues for companies that marketed to boomers.