Consumer Discretionary

• The consumer discretionary sector is among the most sensitive to economic fluctuations. Think of this sector as being made up of things people buy, but can generally avoid buying when times are tough. These include items that consumer "need" but delay buying when times get tough. For example, consumers can repair a car rather than buy a new one.
  
  

Consumer Staples

• Think of the consumer staples sector as items that people buy in good times and bad. Commodities like food are consumer staples. Tobacco, because its use is less sensitive to economic cycles, also fits into this sector. This category is susceptible to economic swings, but less so than discretionary spending. People may buy less food, or different kinds of food, when things get tough, but they still buy food.
  
  

Subsectors

• The classification standard further categorizes industries into subcategories. In the consumer discretionary sector, subsectors include: automobiles, consumer durables, consumer services, media and retailing. Subsectors of the consumer staples sector include food retailers,; the food, tobacco and brewing industries; and household products, such as cleaning products.
  
  

Getting Classified

• Global companies often have diverse interest. General Electric, for example, runs financing companies, consumer goods and media companies. Companies are assigned to the classification according to revenues, but market perceptions---what people think a company does---also play a role. Subsidiaries of large companies whose parent company files results separately are categorized in the sector that is appropriate.