I first wrote about Kohl's (KSS) on April 28, 2009, at a price of $43.82, and shares of the retailer have retreated in bear-hug fashion this summer after hitting a high near $59. Typically, that would be a danger sign, but I'm sticking with the play. Here's why.

Look for Kohl's same-store sales to increase 5% to 6% in this year, FY2011, after a roughly flat FY2010.

Kohl's is a moderate-price retailer that held its own during the recession, and will now benefit from increased spending per customer, as Americans gradually increase dollars allocated to optional, retail purchases.

Kraft Foods (NYSE: KFT) is turning into a "frugal consumer" play, which is why I'm reiterating my Buy rating for the company, first recommended on July 13, 2009, at a price of $26.88.

Kraft will benefit from the now-established "frugal consumer" trend, whereby Americans save more and eliminate needless, optional purchases. Included in the above will be more meals consumed at home per month, which is good news for food company Kraft.

An update on two short positions: McDonald's Corporation (NYSE: MCD), recommended on June 26, 2009 at a price of $57.00, and Fortune Brands (NYSE: FO), recommended on the same day at a price of $35.56.

McDonald's: Hold Short. MCD's shares remain under pressure. The era of the 'frugal consumer' is well underway in the United States, to McDonald's detriment. There's also a trend away from standardized fast food, and toward local, 'roadside' hamburger joints and diners: they offer unique flavors and recipes, fresher food, and often atmospheres that can't be beat.

Did you catch one theme of the frugal consumer era? For middle America, dinner out is out; dinner in is in.

Look for Newell Rubbermaid to continue to profit from this trend, as Americans shun dining out for a very long time, which means leftovers will increase. That's bullish for the company's Rubbermaid food storage containers; kitchen utensils will also see impressive gains.

When I wrote about The TJX Companies (NYSE: TJX) back in November of last year, I was clearly bearish. Hey, things seemed a lot tougher back then, and the frugal consumer was putting a ton of pressure on retail prices. Now, though, after checking out the company's second-quarter report, I find myself losing some of my negative thoughts about it.

According to the press release, sales increased 4% and earnings per diluted share from continuing operations expanded by 27% to come in at 61 cents. This was a penny better than market expectations, according to Earnings.com.

The key statistic in the U.S. Q2 GDP report, aside from the 1% decline in GDP, which was below the 1.5% Bloomberg News consensus estimate: the decline in consumer spending.

Consumer spending declined 1.3% in Q2, compared to a 0.7% increase in Q1. In Q2, durable goods decreased 7.1%, compared to an increase of 3.9% in Q1; nondurable goods decreased 2.5%, in contrast to an increase of 1.9%; and services increased 0.1%, compared to a decrease of 0.3%.

This market remains a stock picker's market. Select the wrong stock, and there's a 30-40% haircut up ahead; select the correct stock, and you're positioned for the recovery with modest downside exposure. For a chance at the latter, consider Newell Rubbermaid (NYSE: NWL).

Newell Rubbermaid has the right goods for the new era: the era of the 'frugal consumer' means Americans will be shunning dining out for a very long time, which means leftovers will increase. That's bullish for the company's Rubbermaid food storage containers; kitchen utensils will also see impressive gains.