Report: Despite optimism, higher-income consumers still adjusting spending
Higher-income consumers are remaining positive about their economic position, but many are still noticing price hikes due to tariffs.
Higher-income households (HHI >$100,000) are increasingly confident, reporting strong expectations for earning (61%) along with greater willingness to spend and save, according to a new report from Alvarez & Marsal Consumer and Retail Group. A quarter (25%) of higher-income households plan to spend more in the next six months, an increase from the 7% who said so in the spring of this year. Last fall, that number was 0%.
“Higher-income households reported a notable increase in intent to make and spend more money this cycle, the likes of which we haven’t seen in over two years,” said Chad Lusk, managing director at A&M’s consumer and retail group. “However, we are also seeing an increased cautiousness and responsibility in how they spend, making more deliberate tradeoffs regarding where they shop, what brands they buy, and how often they’ll indulge to respond to this challenging economic environment.”
Optimism is improving among households making less than $100,000 per year as well, with improved outlook on plans to spend, modest improvements in earning expectations and steady saving intentions.
Tariff awareness is widespread, according to the survey, as the overwhelming majority (93%) of those surveyed reported at least some level of familiarity. Nearly two-thirds describe themselves as “extremely” or “very aware,” underscoring that tariffs remain a visible factor shaping consumer sentiment.
A majority of consumers believe that tariffs have driven prices higher, with nearly two-thirds (63%) of all consumers citing increases in the 11– 50% range. Higher-income households are more likely to report steeper perceived price hikes.
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Across income groups, switching retailers as a strategy has softened. In personal care, both higher-income households and lower-income households are more likely to trade down to cheaper brands at their current store (38% and 44%, respectively) than switching retailers in search of better prices (36% and 30%, respectively).
In the past six months, 43% of respondents cited that tariffs somewhat or significantly led to them decreasing grocery purchases. However, more consumers anticipate increasing their grocery spend (26%) over the next three months than those expecting to reduce spend (19%). Among those tightening budgets, brand trade-down is the more common strategy, as nearly half (49%) indicate they are more likely to switch to less expensive brands at the same store.
Consumers have increased their trips to lower priced grocers, with nearly six-in-10 (59%) having reported making increased trips in the last six months, an increase from 55% in the spring. Sixty-one percent of households with an income above $100,000 reported increased frequency at lower-priced grocers compared to 58% of households with an income less than $100,000.
A&M Consumer and Retail Group surveyed over 2,000 U.S. consumers across income brackets in August 2025 to understand their financial outlook, spending priorities, and shopping behaviors. The full report can be found here.
