NEW YORK – Consumer Edge has identified significant shifts in consumer behavior and retailer performance within the general merchandise sector, as ongoing macroeconomic headwinds, including tariff uncertainty and geopolitical tensions, continue to influence spending patterns. The new report, which analyzes data from 2024 to 2025, highlights how these challenges are shifting consumer behavior and, for specific demographics, are prompting shoppers to seek out more accessible and lower-cost retailers. Consumers have altered their spending behavior in response to these pressures, signaling a widespread realignment in how and where they shop.
Additional findings include:
- High-income and young shoppers trade down: Walmart and Dollar General saw an increase in new customers from the $ 150,000+ income bracket and the 18- to 34-year-old age group, signaling a broader value-seeking behavior.
- Dollar stores and Amazon gain momentum: Dollar Tree and Five Below posted double-digit growth since mid-April 2025, while Amazon maintained steady high single-digit gains and remains the dominant U.S. e-commerce player.
- Warehouse club growth slows: Growth slowed from elevated levels at warehouse clubs like Costco, BJ's, and Sam's Club, as consumers pulled back on bulk purchases after a stock-up-driven boost.
- Target's new customer mix skews older and lower-income: Unlike Walmart, Target's new customer growth is driven by lower-income shoppers, suggesting that it may be losing appeal among higher-income consumers who manage their discretionary spending. Its once-strong "cheap chic" image may no longer resonate with younger, trend-conscious buyers.
- Geographic shifts: Dollar stores and discount chains remain dominant in rural areas with continued expansion, while urban consumers lean toward warehouse clubs and e-commerce. However, Amazon's rapid rollout of delivery could blur that divide.
- Retention trends: Deep brand loyalty contributes to Amazon, Walmart and Costco's strong customer retention rates. Meanwhile, dollar stores maintain lower retention rates, as their value-driven, transactional model attracts more occasional and price-sensitive shoppers.
“Consumers are making deliberate choices as they navigate the impacts of inflation and broader economic uncertainty,” said Michael Gunther, Vice President, Head of Insights, at Consumer Edge. “This shift isn't just about cutting back—it's about redefining value. We're seeing even affluent and younger shoppers prioritize convenience and cost in ways we haven't seen before.”
