Consumers say they're financially worse off and it's changing how they shop

"Rising financial anxiety shows pressure is building beneath the surface. Reaching consumers long term will require retailers to strike the balance between implementing cutting-edge technology and keeping human experience at the forefront. Retailers that emphasize value, convenience, and affordability will be best positioned to maintain consumer loyalty in the months ahead."

"According to the latest EY consumer sentiment survey, 1 in 4 shoppers said they were financially worse off compared to a month ago. The survey, which included responses from more than 2,000 consumers in December 2025, also found that about 70% cited rising grocery prices as a top concern."

"In response, shoppers are making trade-offs. Per EY, 15% of shoppers said they've switched personal care brands to cut costs. Then there are the usual discretionary suspects such as dining out, travel, entertainment, and apparel—all categories consumers pulled back on."

Financial pressure continues mounting for American consumers, with 25% reporting deteriorated financial conditions compared to a month prior. Rising grocery prices emerge as the primary concern for 70% of shoppers. In response, consumers implement multiple cost-reduction strategies: 15% switch personal care brands, while others reduce spending on dining, travel, entertainment, and apparel. Even higher-income households adopt budget-conscious behaviors, utilizing sales, price comparisons, and private labels. This value-seeking trend extends across retail sectors, benefiting budget retailers over premium brands. Retailers must balance technological innovation with human experience while emphasizing value, convenience, and affordability to maintain consumer loyalty. Forward-looking data indicates 34% of shoppers plan reduced spending in 2026, with fast-food establishments experiencing sales growth amid this economic shift.

Read at Retail Brew