As consumers continue to suffer, luxury retail has taken a major hit. Is this just a temporary problem for high-end goods, or is our new frugality a long-term trend that spells doom for the days of conspicuous bling?

Forever changed?
Several family members of mine survived the Great Depression, and the experience forever altered their attitudes toward money. Willful waste was alien to them. They saved and reused whatever they could, and kept a cash stash close at hand, just in case. The hard lessons of the Depression may have created an entire generation that never took anything for granted. To name just one example, our Depression-era forebears would likely never have paid top dollar to buy bottled water when they could simply get it from the tap.

But a housing bubble, cheap credit, and artificially inflated stock prices all lent consumers a devil-may-care attitude, and encouraged the notion that everyone could live the American Dream, whether they could actually afford it or not. And along the way, that dream got seriously supersized.

Forget a modest home, a decent car, and enough income to afford occasional luxuries. Consumers began to feel entitled to huge McMansions, vast gas-guzzling SUVs, bling from Tiffany, apparel from Nordstrom (NYSE:JWN), high-priced yoga togs from lululemon athletica (NASDAQ:LULU), and a latte a day from Starbucks (NASDAQ:SBUX).

Not any more. We're now feeling the pain of plunging home prices, lost jobs, reduced credit lines, and decimated 401(k)s -- and this swift, shocking reality check may be spawning a large-scale cultural shift.

The rumor mill suggests that even wealthier folks aren't really spending much. And if they do buy something pricey, they want a brown paper bag. That's right: It now looks downright tacky to spend on luxury when so many people are suffering. In such an environment, formerly prized brands may now carry guilt by association with the era of conspicuous consumption.

Is luxury out of style forever?
Wal-Mart Stores (NYSE:WMT) recently vowed to keep customers even when the recession ends. Its determination highlights the growing theory that shoppers may not return to their freewheeling ways -- at least, not anytime soon. After such a distasteful binge of living large, it's probably good for us to regain perspective on the things that really matter in life. For investors, however, the experience may not be quite so positive.

Many higher-end brands, such as Williams-Sonoma (NYSE:WSM), could have their growth prospects crippled by a greater move toward penny-pinching. But others should admittedly do fine; Coach (NYSE:COH) has a solid brand and a reputation for quality, and may remain on customers' radar as a luxury label that also offers good, durable value in exchange for its lofty price tags.

Investors should think hard about the long-term future of consumer psychology, and adjust their portfolios accordingly. What do you think? Are consumers forever changed, or will they go back to their free-spending ways once the economy starts looking sunnier? Are some luxury companies simply doomed? Leave your comments below.  

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Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy.