NEW YORK – Few companies were clobbered harder than Starbucks in the recession. The coffee chain with outposts on every corner came to represent all that was wrong with American businesses and shoppers: unchecked expansion, self-indulgence and mindless credit-card swiping.

But now customers who swore off frivolous spending during the recession are lining up again for their $4 caffeine fix. The company’s net income nearly doubled and revenue rose 17 percent in the most recent quarter compared with a year earlier, as more Americans allowed themselves a small treat.

After seeing their retirement funds and home equity shrink severely, consumers had tightened their belts in a shift some economists dubbed the New Frugality. But affordable luxury goods like gourmet coffee, lingerie and high-end skin cream have been enjoying a comeback since the stock market began to rally in August and higher-income Americans started feeling better about their finances.

At Estee Lauder Cos., whose brands include Clinique and MAC cosmetics, CEO Fabrizio Freda says customers who traded down to drug store brands when times were tough are returning. Revenue was up 14 percent last quarter, driven by brisk sales of high-end moisturizers and eye creams.

Specialty items like the “Miraculous” push-up bra have buoyed the company that owns Victoria’s Secret and Bath and Body Works. Revenue rose 12 percent last quarter at Limited Brands Inc. as shoppers treated themselves to its stock in trade.

“People didn’t feel good about having little indulgences” in recent years, says David Palmer, an analyst with UBS Investment Research. “The Suze Orman-type talk shows were telling you to kick your Starbucks habit.”

Now, he says, austerity fatigue may be setting in.

 


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