Consumers are Navigating Budget Pressures: What They Cut, What They Keep
Even as inflation slows, many Americans are still feeling the pinch. According to a recent Wall Street Journal article, middle-income households—those earning between $50,000 and $100,000—are increasingly trading down, cutting back, and feeling squeezed, even as higher earners continue to spend freely.
To better understand how shoppers are adapting, Astrea Analytics conducted a study exploring which product categories consumers are most willing to maintain spending and stick with their current brands versus where they are open to cutting back on spending or switching to cheaper alternatives.
The results offer a helpful lens into current consumer priorities—especially for brands looking to stay relevant in a cost-conscious environment.
Study Logistics
Astrea surveyed 750+ primary shoppers using a Max-Diff choice exercise across 41 categories, ranging from food and personal care to durables and entertainment. Participants ranked their likelihood to either stop purchasing or trade down within each category.
What Consumers Are Protecting
Core essentials like toilet paper, milk, toothpaste, and internet service are largely shielded from budget cuts. These items are seen as necessities, with strong associations to quality and trust.
Fresh produce, meat, and hygiene products also show high resistance to brand switching, suggesting consumers are reluctant to compromise on perceived quality.
Where Consumers Are Cutting Back
Discretionary spending is the first to go. Gym memberships, vacations, video games, and streaming services top the cut-back list.
In food, packaged snacks and indulgences like cookies, soft drinks, and frozen pizza are more vulnerable.
Trade-Down vs. Cut-Back: A Useful Distinction
Consumers don’t always leave a category entirely. In many cases, they’re open to trading down to lower-cost alternatives rather than cutting the product out altogether.
- Durables (e.g., electronics, clothing) tend to see more cut-back behavior where consumers might opt out or delay purchases rather than compromise.
- Indulgent FMCG (e.g., snacks, treats) are more likely to be traded down. Consumers express a likelihood to stay in the category but switch brands to save.
Understanding this distinction can help brands decide whether to protect premium offerings, introduce value-tier products, or adjust pricing strategies.
Demographic-Level Insights
The study also explored differences by income, employment, household size, gender, age, education, political affiliation, and expected financial outlook. While the overall trends held steady, lower-income and financially pessimistic consumers showed greater sensitivity to price and were more likely to cut back.
Takeaway for Brands
Consumers are making thoughtful trade-offs. Essentials are protected, indulgences are vulnerable, and value matters more than ever. By tuning into these patterns, brands can better align their offerings with what shoppers are willing to keep.
Astrea is here to help. If you have ideas for updating your portfolio to keep your brand in shopping carts and could use a sounding board, please reach out anytime.
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Source: "The Middle-Class Vibe Has Shifted From Secure to Squeezed." The Wall Street Journal, August 31, 2025. By, Katherine Hamilton and Alison Sider.
