CHICAGO – The Kearney Consumer Institute (KCI) has released its latest Consumer Stress Index, showing the sharpest rise to date in U.S. consumers’ stress.
The quarterly update, based on a survey of more than 24,000 consumers across 12 countries, suggests that changes in consumers’ financial security and worries about artificial intelligence are exacerbating stress worldwide, most notably in Germany, the United Kingdom and the United States.
U.S. consumer financial security has declined 13% from a year ago, KCI says. Americans' concerns over their ability to afford an emergency bill increased 18% between this year's first quarter and the second quarter.
Current spending levels should not be construed as durable demand, according to the update. Kearney finds that increased stress is changing how consumers see value: more purchases are being based on purpose, not category.
“Consumer resilience may be more fragile than the top-line numbers suggest,” notes Katie Thomas, a KCI lead and author of the update. “Calm top-line numbers are often hiding real deterioration underneath: country scores and spending levels can appear stable while the underlying pressures are moving significantly. Declining financial security, concerns about affording groceries or an emergency expense, and rising anxiety around AI, trade, housing, and global conflict suggest consumers are under more strain than the averages reveal.”
No category is inherently recession-proof
No category is inherently recession-proof, KCI says in the report. A purchase is protected only to the extent that the consumer sees it as necessary, identity-reinforcing, or unusually difficult to replace.
This helps explain why some discretionary purchases are protected while products in presumably essential categories become vulnerable. The grocery category illustrates why essential does not necessarily mean resilient, explains Thomas.
“A lot of the spending currently reading as ‘resilient’ may just be spending that hasn’t hit its breaking point yet," she says. "Grocery may be assumed safe because consumers must continue buying food, but individual brands and products face significant exposure. The category is crowded, consumers have extensive choice, and switching carries little risk. Brands need a clear reason for consumers to stay with them, whether through superior function, association with identity, wellness appeal, or some other meaningful point of differentiation.”
