Belt-tightening has become a harsh reality for America’s hard-up consumers in more ways than one. In a stark sign of the toll on US households from recessionary times, big-eating Americans’ notorious appetites are feeling the squeeze, with their spending on food falling at the fastest pace in 50 years.

The startling trend emerged in official figures yesterday showing that a slump in US consumer spending left the American economy shrinking at the fastest rate for seven years in the past quarter.

Overall US consumer spending fell in the quarter at an annual 3.1 per cent rate, its deepest decline since 1980. But most striking was the drop in food spending, which plunged at an annual pace of 8.6 per cent. Spending on goods other than durable products plummeted at an annual 6.4 per cent that marked the fastest fall since 1950, while demand for durable goods fell by 14.1 per cent, the steepest drop since 1987.

Olga Munuz, a server at the Europa Café in central New York, has discerned a significant change in the behaviour of her customers as rising unemployment has knocked their confidence at the same time as increased ingredient costs have pushed up prices. “Before, they might have bought a coffee and a sandwich. Now many just buy a coffee. When I ask them why, they say they are bringing their own lunch from home,” Ms Munuz says.

Brian Horgan, a software consultant, lists “eating out less” as the most significant belt-tightening measure he has taken in the face of gloomy economic prospects.

“If I hadn’t have bought an apartment six months ago, that would have been the biggest difference to my spending, because I wouldn’t buy it now. Me and my girlfriend could still get the loan, but she works for a bank and, although she looks ok, you never know,” Mr Horgan added.

John Owens, a food analyst at Morningstar in Chicago, said that food and restaurant groups are being forced to fight back to win customers, most commonly by offering cheap deals. “People are eating out much less frequently and choosing cheaper options when they do,” Mr Owen says. “McDonald’s is pushing its $1 value meal much harder now and Taco Bell has introduced its 79 cents, 89 cents and 99 cents value menus.”

As always, some people are flourishing in the economic downturn. Don Ward, a shoeshiner, said that hard times have done wonders for his business. “People are not buying new shoes, but instead are refurbishing their old ones. And guess who they need to come to more often? Business is definitely up,” Mr Ward said, before shouting “Young man, look at those shoes, get over here” to a potential customer.

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