Survey: Consumers to continue opting for lower-priced retailers
Discount grocers and private label products are resonating with consumers as price sensitivity continues to persist.
That’s according to the Spring 2026 Consumer Sentiment Survey from global professional services firm Alvarez & Marsal’s Consumer and Retail Group (A&M CRG), which found that financial pressure continues to weigh on consumers and is fundamentally reshaping the way they shop, spend and make decisions across categories, including shifting to lower-priced retailers, buying less volume and accelerating use of private label products.
Overall, consumers continue to plan to pull back on spending for the foreseeable future, the study found, with grocery being the only category where shoppers expect to spend more. Consumers are shifting to lower-priced grocers over cheaper brands, with more than a quarter (27%) planning to keep their brands but switch to a less expensive store. This is an increase from 16% last fall, which is fueled by improving perceptions of discount grocers, according to the report.
[READ MORE: Consumer sentiment nears four-year low amid worries about high prices]
Private label continues to shed its trade-down reputation, the study revealed, as 68% consumers rate store brand quality as equal to or better than national brands. More than half (56%) say they provide unique flavors or offerings they prefer, while 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, according to the survey.
Additional insights from the study are below:
•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 haircare and skincare are proving resilient and are seen as necessities, while fragrance and makeup purchases are skewing more discretionary.
•Even as overall spend declines, shoppers buying apparel are selectively trading up for products that deliver on quality, performance and longevity, with fit and comfort, quality of materials and durability cited as the top trade-up drivers, according to the survey.
•AI is emerging as a meaningful force in shopping journeys, with 25-41% of consumers using AI for product discovery, research and value identification across apparel, beauty and grocery. Millennials and Gen Z in particular are increasingly reliant on this technology, with nearly two-thirds (64%) of consumers aged 18-44 asking AI for recommendations, and 66% of those acting on them.
“Today’s consumers aren’t simply tightening their belts — they’re making thoughtful tradeoffs,” said Chad Lusk, managing director at A&M CRG. “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.”
A&M CRG surveyed over 2,100 adults for its spring report.
