Spending, Disrupted

Economy

Spending, Disrupted

Heightened caution, rising frugality and a renewed focus on financial discipline will define global consumer behaviour in 2026, according to Spending, Disrupted: AlixPartners’ 2026 Global Consumer Outlook. The annual report, based on a survey of more than 13,000 consumers across nine countries, points to a broad-based retreat in spending intentions worldwide.

The shift is stark. The gap between consumers planning to spend less versus more has widened sharply, with net lower spending intentions rising by over 60% to an 18-percentage-point difference. The pullback cuts across age, income and geography.

“Consumers across virtually every demographic are resetting their household budgets,” said Randy Burt, Americas Leader, Consumer Products at AlixPartners. “Younger shoppers and high-income earners - both traditionally more resilient - are signalling a retreat. This reflects lingering inflation pressures, muted wage growth, and a clear move toward more selective, value-driven consumption.”

Spending declines across major markets

The outlook deteriorates across most regions. China has seen the sharpest reversal, flipping from a projected 10 percentage-point net increase in spending for 2025 to an 8-point net decline in 2026. In the US, consumers plan to cut back across dining out, discretionary retail, travel and fitness, with saving extra income emerging as a growing priority.

In the UK, consumers report high levels of “experience fatigue”, saying they are more willing to reduce spending on restaurants and retail if offerings feel overpriced or underwhelming. Frugality continues across DACH markets, while France records the deepest pullback globally, with a net 33-point decline. Italy also sees a widening slowdown, with net spending down 17 points.

The Middle East is the key outlier. Consumers in Saudi Arabia and the UAE expect a net 5-point increase in spending in 2026, the strongest outlook among all regions surveyed.

“Winning in 2026 will require sharper value-led pricing, more personalised offers, and experiences that justify every incremental dollar,” said Paul Martin, Global Retail Growth Leader at AlixPartners. “Retailers must reinforce value in essentials while staying relevant in discretionary categories.”

Older and wealthier consumers join the pullback

Consumers aged 65 and above remain the most cautious, projecting a 35-point net reduction in spending. Notably, high-income consumers, who last year expected to spend more, now forecast a 5-point decline, underlining the reach of economic pressures.

Globally, only consumers under 35 expect to increase spending on a net basis. Lower-income groups are most likely to report significant cutbacks. Younger consumers aged 18–24 are the most optimistic about non-food retail, while US consumers lead globally in plans to save additional income, cited by 42% of respondents.

Groceries stand out as the only growth category

Groceries are the sole category expected to see net growth globally, at +8%. However, this reflects value inflation rather than higher volumes. China is again an outlier, with grocery spending slipping by 2 points.

Consumers are shopping more methodically - planning meals, making lists, avoiding impulse buys and switching to private labels. Discounts, loyalty programmes and multi-buy deals are increasingly influential. More time spent at home and higher at-home consumption are reinforcing these trends.

Biggest cuts: Discretionary spending

Non-food retail is set for the steepest decline, with a 24-point net reduction globally and a 44-point drop among consumers aged 65+. Eating and drinking out follows closely, down 21 points, while travel is expected to swing from modest growth in 2025 to a 9-point net decline.

Five factors are driving the pullback: persistent financial strain, weakening value perception -especially in dining - reprioritisation across categories, a new era of disciplined purchasing, and the impact of GLP-1 weight-loss drugs on health-related spending, particularly in the Middle East.

“Consumers are becoming more intentional, and nowhere is that more evident than in China’s reversal,” said Lisa Hu, Greater China Consumer Products & Retail Practice Leader at AlixPartners. “Local producers are increasingly looking outward as domestic demand softens.”

Price remains the primary trigger for switching brands or retailers, but loyalty drivers vary. Grocery shoppers are highly deal-sensitive, non-food retail customers weigh service and omnichannel experience, while fitness and wellness retain the strongest loyalty, driven by consistent service quality.

As consumers reassess every purchase, 2026 is shaping up as a year where value, relevance and trust will matter more than ever.

The shift is stark. The gap between consumers planning to spend less versus more has widened sharply, with net lower spending intentions rising by over 60% to an 18-percentage-point difference. The pullback cuts across age, income and geography.

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