Consumer behavior rarely snaps back to where it started anymore. That’s been one of the toughest lessons of the past six years. Years of pandemic, supply shortages, inflation, and conflict.
Shoppers, who like many retailers were simply caught in the middle, became experts at comparing prices, stacking digital coupons, buying private label, and splitting their weekly grocery trips across multiple retailers.
The assumption was that those behaviors would gradually fade as inflation cooled; it’s happened before in history. But new GPG analytics and research from Big Chalk Analytics suggests something very different is happening.
Bargain hunters aren’t disappearing. In fact, that behavior is spreading throughout the middle class – a cohort many researchers figured wouldn’t take to it.
Grocery retailers have largely viewed value merchandising as a strategy aimed at lower-income households. But Big Chalk’s latest Trade-Off Consumer report suggests the industry’s biggest competitive battle is increasingly shifting into the heart of the income spectrum.
The firm’s research found that Trade-Off Consumer penetration among households earning $60,000 to $99,999 rose from 32.1% to 34.6% over the past year. Even households earning $100,000 to $149,999 saw Trade-Off Consumer participation increase from 30.6% to 31.7%. Meanwhile, lower-income households remained essentially flat at 43%, while the highest-income households actually declined from 23.4% to 20.1%.
Of course, the middle of the income ladder has historically been conventional grocery’s sweet spot.
These aren’t consumers living paycheck to paycheck because they have no choice. But they are increasingly behaving that way because they’re making conscious decisions about where every discretionary dollar delivers the greatest value.
What a Trade-Off Consumer Is (and Isn’t)
Big Chalk defines a Trade-Off Consumer as someone actively cutting spending across four or more major household budget categories. Today, that group represents 34.5% of all U.S. households, virtually unchanged over the past two years. In other words, the overall size of the value-conscious population has stabilized, but its composition is changing: The middle class is moving into it.
Now, this isn’t happening because consumers have stopped spending. Quite the opposite.
One of the report’s most fascinating observations is what Big Chalk bluntly calls the “F#@& it, I’m flying” mentality. Despite renewed inflation pressures tied to higher oil prices, consumers continue taking vacations, dining out, and spending on entertainment. Airline traffic remains healthy. Restaurant participation is increasing. Movie attendance has rebounded. Even among Trade-Off Consumers themselves, 83% report dining out regularly, nearly 73% took a leisure trip and almost 65% went to a movie during the past year.
And that’s the paradox. Consumers haven’t stopped spending, but they’re dramatically more selective about where they spend.
Nowhere is that more evident than the grocery store.
How Middle-Income Families Are “Using” Their Grocery Budget
Food remains one of the few major household expenses families can actively manage every single week. Mortgage payments don’t change overnight. Insurance premiums rarely fall. Utility bills offer limited flexibility. Groceries, on the other hand, are endlessly adjustable.
Consumers can switch retailers or brands, buy fewer units, substitute private label, wait around for promotions, tame impulse purchases – anything’s possible. That makes grocery the financial shock absorber for household budgets.
Big Chalk’s numbers reinforce just how deeply those behaviors have become embedded. Even as fewer consumers now report buying less food overall, shoppers continue searching aggressively for value. Around 29% say they’re shopping more grocery retailers than before. Digital coupon use has climbed to 27.1%, while 35.7% say they’re increasingly purchasing whichever product happens to be on promotion rather than sticking with a preferred brand. Meanwhile, the share of shoppers intentionally buying fewer groceries overall has actually fallen to 21.1%, suggesting volume may eventually recover even if deal-seeking does not.
And so consumers appear willing to buy more food again… but they want (or need) to keep doing it strategically.
In any case, the era of effortless pricing power appears to be over. Retailers can no longer assume that middle-income households will reward convenience with unquestioned loyalty. Those shoppers have become remarkably sophisticated. They’re comparing prices across banners, leveraging digital offers, timing purchases around promotions, and treating grocery shopping like some kind of weekly optimization exercise.
The biggest lesson from Big Chalk’s report is that value is now a mainstream expectation, 100%.
Retailers that continue viewing value as something designed primarily for financially distressed households may be looking in the wrong direction. If these numbers are anything to go on, one of the industry’s fiercest competitive battles is going to be for middle-income dollars.