Two speed retail

Recently, we came across a study with some rather interesting—if not surprising—findings. In 2025, the retail world is facing a growing divide between consumer groups. While low-income households are continuing to cut back on spending, wealthier consumers are maintaining their purchasing habits with little restraint. IGD’s Shopper Outlook 2025 report highlights a two-speed consumption pattern, forcing retailers to rethink their strategies. After reviewing this report, there are a few key questions you should consider :

How do shopping outlooks vary across different groups?
What significant behavioral changes are emerging?
Which product categories are most at risk?
Where can retailers and suppliers provide better support and make progress?

Here are the summarized answers.

Five Key Takeaways

Confidence remains low :
In 2025, consumers will continue to act cautiously in a globally uncertain environment.
Low-income households must sacrifice more :
These households have already given up many extras to cover basic needs and will need to cut even further. The food industry must step in to support them.
Affluent consumers keep spending :
Despite rising prices, some people have the financial buffer to maintain their usual purchasing habits, especially for premium products.
Families are adapting the most :
Households with children are changing their shopping behaviors the most buying in bulk, hunting for deals, and using various saving strategies to feed the family.
Young people are the most optimistic :
Despite facing challenges, especially with housing access, younger generations remain hopeful and still indulge in small treats.

Consumers Are Adapting Their Strategies

Consumers especially those under greater financial pressure are employing a wide array of saving strategies.

At-home tactics:

Batch cooking
Meal planning
Freezing ingredients
Timing purchases with income availability

Shopping planning tactics:

Comparing prices across stores
Switching between channels and retailers for better deals

In-store tactics:

Looking out for promotions
Using and optimizing loyalty programs
Reducing or limiting quantities purchased
Switching to private label brands
Buying in bulk
Stocking up on discounted items nearing expiry
Or simply cutting certain purchases altogether

Saving strategies vary by category, with some being more exposed to quality reduction or downsizing. IGD’s report provides a category-by-category breakdown and tailored recommendations for the industry.

Caroline Young, Insight Manager at IGD commented the report “The long-sought stability still seems a long way off, and this uncertainty makes people tighten their belts in anticipation of future shocks. For many households, after years of cutting spending, there is little left to cut. But there are still many opportunities to attract and retain shoppers.”

For more information, visit: www.IGD.com

Author : Giorgi Sabanadze

Igd Consumer Insights Confiance Outlook