New York, NY, November 5th, 2025, NewsDirect
- Consumer sentiment continues to be split with higher-income households driving up average consumer optimism in overall financial outlook, mirroring trends from Spring 2023
- Despite the disparity in consumer financial plans, both lower and higher-income households are looking for ways to stretch their wallets, including but not limited to: increased trips to lower-priced grocers, switching to cheaper brands and private label, and reducing discretionary spend and grocery purchase volume entirely
- Categories such as snacks and beverage are experiencing brand loyalty challenges driven by price sensitivity, meeting dietary and lifestyle needs, and an increased desire to experiment, especially among younger consumers
Global professional services firm Alvarez & Marsal’s Consumer and Retail Group (A&M CRG) has released its Fall 2025 Consumer Sentiment Survey, the latest chapter in its bi-annual report that tracks U.S. consumer behavior in response to ongoing economic conditions. Based on a nationally representative survey of over 2,000 adults, this fall’s edition uncovers increased disparity in financial outlook and spending behavior across both higher and lower income households.
“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 2 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.”
Amid economic uncertainty, value continues to be a top priority for all consumers. Consumers are making tradeoffs in beauty and grocery categories that balance price and value. In beauty, consumers are shifting towards purchasing fewer items and switching retailers entirely, signaling to retailers the need to invest in retention and loyalty programs. In grocery, 68% of respondents cite quality of store brands as good as or better than national brands, showing that value is driven beyond price, but also by quality and taste of products.
The study found that:
- Financial outlook has improved since Spring ’25, with higher-income fueling fall spending, while middle- and lower-income groups continue to pull back on spending.
- Grocery is the only category with increased intent to spend more over the next 6 months (6% net-more) while discretionary categories such as Accessories & Jewelry, Alcohol, and Sports & Outdoor Entertainment experienced the largest declines.
- Store brands and lower priced grocers are gaining traction not just for price, but for perceived quality—signaling a shift in how consumers define value today.
- Consumers are reducing spending in restaurants and a popular alternative is cooking meals at home, correlated to grocery activity. Traditional tradeoffs such as reduced restaurant visits and use of deals continue to be used by consumers.
- For snacking and beverage categories, brand loyalty is being challenged by both price sensitivity and wellness trends. 41% of consumers consider price as the main reason to switch brands in both snacks and beverage categories, while 21% cite health benefits as the main driver for snacks and 17% for beverage.
“Brand loyalty continues to be tested and appears to be waning, especially among younger demographics,” said Lusk. “Gen Z and Millennial consumers are driving a shift toward exploring a wider range of brands. They seek excitement, uniqueness, and are increasingly evaluating alternatives based on their quality and how well they align with their lifestyles. This trend is especially evident in grocery categories, where private label products have narrowed the perception gap with national brands in terms of quality, unique offerings, and meeting dietary needs, appealing to consumers across all income levels.”
To download a pdf of Consumer Sentiment Survey Fall 2025, please visit:
https://alvarezandmarsal-crg.com/insight/consumer-sentiment-survey-fall-2025/
About Alvarez & Marsal Consumer Retail Group
Alvarez and Marsal’s Consumer and Retail Group (A&M CRG) is a management consulting firm that tackles the most complex challenges and advances its clients, people, and communities toward their maximum potential. CRG combines the best of A&M’s broader firm’s bias toward action and practicality with deep consumer and retail industry experience. CRG partners with businesses across a wide range of categories including Food & Beverage, Beauty & Personal Care, Grocery, Mass Merchandise, and Apparel & Footwear to drive significant performance improvement.
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David Schneidman
Alvarez & Marsal
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