The New Value Equation: How Consumer Spending Is Changing

One of the easiest ways to describe today's consumer is also one of the least useful: They're looking for value.

Of course they are.

After years of higher everyday costs and economic uncertainty, price matters. Consumers are comparing more, waiting longer, hunting for deals and questioning purchases they once made without much thought. But look closely at where people are actually spending and the picture becomes considerably more complicated.

Consumers aren't uniformly trading down. They're trading differently.

At MADE Trends, we think that distinction will be fundamental to understanding consumer behavior through the second half of the decade.

Consumers are saving and splurging at the same time

McKinsey's global ConsumerWise research found that 79% of consumers surveyed were engaging in some form of trade-down behavior in 2025.

But here's the more interesting number: more than one-third reported trading down in one category while simultaneously planning to splurge in another. Even essentials aren't immune. Nineteen percent said they intended to reduce spending in a nondiscretionary category while splurging somewhere discretionary. 

That's not an irrational consumer. It's an increasingly strategic one. The same person can buy a $7 coffee in the morning, shop private label in the afternoon and spend hundreds on sneakers, skincare, travel or a concert that evening. Traditional definitions of the "value consumer," "mass consumer" and "premium consumer" begin to fall apart. The consumer can be all three.

Welcome to the high-low economy

We've been watching this behavior emerge across retail. A shopper might combine Uniqlo basics with a luxury handbag. Buy secondhand designer but pay full price for a new beauty launch. Choose private-label groceries and expensive supplements. Wait for a promotion on household products but refuse to compromise on a vacation.

We call this the high-low consumer. And importantly, value-seeking isn't confined to lower-income households. Deloitte's 2025 research found that four in 10 Americans surveyed could be classified as value seekers, with some of the strongest changes in discretionary spending occurring among consumers earning $200,000 or more. Income alone is becoming a less reliable predictor of where someone will economize.

The more useful question is: Where will this consumer compromise — and where won't they?

Private label isn't the consolation prize anymore

One of the clearest manifestations is the evolution of private label. U.S. store-brand sales reached a record $282.8 billion in 2025, according to the Private Label Manufacturers Association. But the story isn't simply shoppers choosing generic products because they're cheaper. Numerator found that premium private label accounted for 40% of private-label spending by 2025, gaining share compared with 2019.

Meanwhile, NIQ research across 25 countries found 69% of respondents considered private labels good value for money and 68% considered them good alternatives to name brands. That's an important psychological change. Private label increasingly isn't the product consumers settle for. Sometimes it's the product they prefer.

Price and value are not the same thing

This is where the conversation becomes more interesting for brands. Deloitte estimates that between 10% and 40% of consumers' perception of a brand's value can come from factors other than price. Which means winning on value doesn't necessarily mean being cheapest. Value might mean performance. Design. Quality. Convenience. Longevity. Service. Identity. Experience. Trust.

The consumer isn't simply asking: "How much does this cost?"

They're asking: "Is it worth it?"

Those are fundamentally different questions.

Premium isn't disappearing

This leads us to another important distinction. Premium isn't disappearing. Unexplained premium is becoming harder to defend. Consumers will still pay more when the difference feels meaningful. Exceptional quality, performance, cultural relevance, design, convenience, emotional connection and experiences can all justify price. The challenge is making that difference legible.

Why does this cost more? Why is it better? Why should I care? When the answers are clear, consumers can remain surprisingly willing to spend. When they're not, price becomes the easiest point of comparison.

The squeeze is happening in the middle

This creates an interesting polarization. At one end of the market sits exceptional value. At the other sits exceptional desirability. The increasingly uncomfortable territory is between them: products carrying a premium without giving consumers a compelling reason for that premium to exist.

Value retailers have an opportunity here as well. As their product quality, design, merchandising and presentation improve, they can deliver something consumers once expected primarily from higher-priced brands: desire. That's when value becomes much more powerful than cheap.

What this means for brands

The first response to a value-conscious consumer shouldn't automatically be another promotion. The better question is: Where do we earn our price?

That answer might be product innovation. Better design. Service. Convenience. Scarcity. Quality. Community. Trust. But something has to do the work. Because the winners of the next value cycle won't necessarily be the cheapest brands or the most expensive ones. They'll be the brands that make consumers believe they received more than they paid for.

What we're watching next

The new value equation isn't simply a reaction to inflation. It's becoming a mindset. Consumers have learned to compare, substitute, wait, trade down and selectively trade back up. They're becoming increasingly fluent at moving between price tiers. But they're not giving up aspiration. They're becoming more particular about what deserves it. And that distinction could reshape everything from private label to luxury over the next several years.