NEW YORK — Global professional services firm Alvarez & Marsal’s Consumer and Retail Group (A&M CRG) recently released its “Spring 2026 Consumer Sentiment Survey,” the latest installment of its biannual report examining how U.S. consumers respond to evolving economic conditions. Based on a nationally representative sample of more than 2,100 adults, the survey indicates that ongoing financial pressure continues to weigh heavily on consumers, fundamentally reshaping how they shop, spend and make purchasing decisions.
“Today’s consumers aren’t simply tightening their belts — they’re making thoughtful trade-offs,” said Chad Lusk, managing director at A&M’s Consumer and Retail Group. “They’re cutting back on volume and dramatically changing shopping routines to stretch their wallets. At the same time, consumers are choicefully investing in products that deliver recognizable differentiation and value at higher price points. Whether it’s a premium grocery item with better ingredients, an apparel piece built to last or a beauty product that actually performs, consumers are buying less but expecting more.”
The data reflects a consumer base seeking alternative ways to navigate financial pressure beyond simply spending less. Across categories, consumers are making deliberate behavioral shifts to stretch their wallets, and the cumulative effect is a fundamental change in how they shop.
Lower-price Retailers Making Their Mark
The study found that grocery remains the only category where shoppers expect to spend more, prompting them to actively seek ways to manage spending. Consumers are shifting to lower-price grocers over cheaper brands, with 27% planning to keep their brands but switch to a less expensive store, up from 16% in fall 2025. This is fueled by improving perceptions of lower-price grocers. Lusk said lower-price retailers are doing an increasingly better job at delivering elements of the grocery shopping experience that were legacy sacrifices for customers.
“In our latest Consumer Sentiment survey, all cohorts on average are net-consolidating shopping trips toward lower-priced retailers and finding great experiences there. 60% to 70% believe that lower-price grocers are now offering as good of a selection, are as quick and convenient to get in and out, or as easy to navigate and shop once inside, and have service and cleanliness levels as good or better than traditional grocers. Perhaps consumers were initially reluctant to change their physical grocery shopping routines, but once a behavior is changed and maintained and there are good experiences on the other side of the change, it is more likely to stick. And we see it changing market share and competitive responses in real time. Promotional intensity is increasing, retailers are investing in streamlining operations to drive out costs, as well as consumer loyalty, and the share of shelf dedicated to private label offerings is growing in order to combat this pressure.”
He says in beauty, 43% of consumers have simplified their routines, but they are becoming more intentional about where they spend in the category. “Spending habits in hair care and skin care are proving resilient and are seen as necessities, while fragrance and makeup purchases are skewing more discretionary.”
Growing Confidence in Private Label
In addition, private label continues to discard its trade-down reputation: 68% of consumers rate store brand quality as equal to or better than national brands, 56% say they provide unique flavors or offerings they prefer, and 69% say store brands meet their dietary or lifestyle needs. This sentiment is shared by both high- and low-income households and skews even higher for younger generations.
“Growing confidence in private label is reshaping the traditional value equation in grocery, as consumers increasingly view store brands as credible alternatives to national brands on quality, innovation and dietary fit — not just price,” said Lusk. “Private label has shed its trade-down reputation, even at the top of the income spectrum. Higher-income shoppers are embracing private label as a ‘smart choice’ rather than a compromise, which allows for retailers to capture greater loyalty and margin across income segments. Of all the sacrifices consumers are making to stretch their wallets, this feels like less of a sacrifice to them.”
He continues, “As private label sophistication increases, more premium, health-focused and specialty store brand products are introduced, grocery shelves are reshaped, margin shifts move toward retailers, and national brands are put on notice. Therefore, it increases pressure on national brands to justify price premiums in attributes other than legacy brand name and reputation, including breakthrough innovation and performance to maintain share positions. The result is a more competitive market with increased relevance to the consumer.”
Lusk said that there was a sharp contrast between grocery and restaurant spending expectations. “It has been very common in our survey to see an inverse correlation between grocery and restaurant spend, indicating how consumers make trade-offs between food spend at home and away from home. Restaurant spend, including dining out, carryout and delivery, is one the most discretionary spend categories for which we survey, which translates to it being one of the biggest intent-to-spend victims during periods of lower sentiment. Lower-income households, in particular, are increasingly substituting restaurants with at-home meals, with 26% citing cooking at home as an alternative to dining out in order to better manage budgets.”
In summary, he says that consumers are reorienting the importance of brand in their decision making, and loyalty is waning. “That’s not to say branded products cannot win — of course they can. But consumers are focusing less on the logo and more on the attributes that define the product.”
