The global recession has turned New Zealand into a nation of bargain-hunters as they adapt to shrinking budgets and a sluggish economic recovery.
Debit and eftpos card use is up and credit cards are being shelved as shoppers look for cheap deals and discounts, and retailers and restaurants are engaging in price wars to attract increasingly frugal customers.
A report by Nielsen yesterday showed consumer confidence fell last year.
The market research company's Consumer Confidence Index showed a nine-point decline to 90.
The index is based on a global survey which asked respondents their views on their country's economy, their job prospects and their personal finances.
Retailers Association chief executive John Albertson said there had been signs of recovery in retailing over the past four or five months.
"But I don't think we are ever going to go back to as things were. I think the consumer has changed forever."
Shoppers had once been happy to run up debt, but had gone through a "day of reckoning" and increasingly used debit and eftpos cards rather than credit, Mr Albertson said.
"They have had the fright on debt, and there's a growing trend to purchasing done online," he said.
"I think what we've got now is quite a different consumer, who is happier to live within their means."
Nielsen's director of client service in New Zealand, Kate Terry, said there were signs of recovery this year, but the decline in confidence last year was "noteworthy".
The Christchurch earthquakes and global and domestic uncertainty were the main reasons for the slump.
The report found seven out of 10 New Zealand households had made spending changes, including cutting back on non-essential purchases and using discounts and special deals.
Shoppers had become more sensitive to savings; 65 per cent of those surveyed said they now looked for promotions and price discounts at the supermarket.
More than half said they now bought only the essentials or had cut down on luxuries, and 34 per cent had switched to cheaper brands.
"As the global financial crisis hit, the percentage of items that were bought on promotion has increased, and it continues to gradually incline," Ms Terry said.
"People are in belt-tightening mode. That's the key view at the moment ... There's been a lot of coverage about the need to be more savers than spenders, and people have listened to that."
Restaurant Association chief executive Marisa Bidois said feedback from members was that customers were markedly more price-driven.
"We are definitely feeling that change in consumer habit ... especially the added pressure with all of the daily deals and what not.
"In certain areas of the country there are price wars. For example, in Queenstown there's a $10 lunch phenomenon going on," Ms Bidois said.
ASB chief economist Nick Tuffley said consumer and business confidence had been weak last year, but there were signs of recovery this year.By Nicholas Jones Email Nicholas