Consumer spending has proven remarkably resilient in 2026. U.S. retail and food services sales were up 6% year over year in August, even as consumers contended with higher prices, energy costs, and broader economic uncertainty. But beneath the headline numbers, where consumers are choosing to spend—and what ultimately wins them over—is changing.
That distinction matters as businesses and investors try to understand what’s driving consumer behavior. In The State of the Consumer: The 2026 Edition, Sharon Zackfia, CFA, partner, and group head of the consumer sector, and Dylan Carden, consumer analyst, find that consumers are becoming increasingly selective, creating a landscape with more pronounced winners and losers.
“The consumer is resilient,” said Zackfia, “but it’s also a very selective consumer.”
Inflation Fatigue
Higher gas prices have historically raised concerns about consumer spending by putting additional pressure on household budgets. But despite a spike in gas prices earlier this year, consumer spending has remained resilient. William Blair research suggests the cumulative effect of inflation across everyday and discretionary categories may be more important to consumer behavior.
Apparel is one area where that pressure is showing up, Carden added. That category experienced cumulative inflation of 11% between 2022 and 2024, following decades in which pricing remained relatively flat. That increase came amid broader price increases across discretionary categories, leaving consumers to absorb higher costs across more areas of their budgets. Now, resistance to additional increases is beginning to emerge.
That doesn’t necessarily mean consumers have stopped spending; instead, they’re becoming more discerning about what's worth paying for.
Rethinking What “Value” Means
Price remains a critical consideration, particularly for lower-income households, which have been disproportionately affected by inflation and other economic pressures. But price alone doesn’t determine where consumers spend.
“There is price, and that’s important,” Zackfia said. “But there’s also value.”
That value can encompass the product itself, the service surrounding it, and ultimately, what consumers believe they’re receiving for their money.
For example, restaurant sales growth accelerated during 2026, even as higher gas prices fueled concerns about consumer spending. Restaurants have raised prices at a slower pace on average this year, while the price gap between dining out and groceries has narrowed, strengthening their relative value proposition.
Consumers are also showing that being selective doesn’t always mean paying less. Zackfia explained that remains particularly apparent across restaurants and other services, where consumers continue to trade up for better experiences and higher quality.
William Blair's equity research on GLP-1 users illustrates that dynamic. While users reported dining out less frequently after starting the medications, their spending per restaurant visit increased—suggesting that even as consumers become more selective about when they spend, they may be willing to pay more on the experiences they choose.
For consumer-facing businesses, that selectivity raises the stakes. The brands gaining ground aren’t necessarily those offering the lowest price. Increasingly, they are those finding the right balance among affordability, quality, and experience—and giving consumers a reason to come back.