Consumers are trying to adapt to higher living costs through value-seeking behaviors, curbing spending, and budget reallocation, according to insights from EY. This, as long‑term financial anxiety deepens. Just how much this financial stress is affecting US consumers is still unclear due in part to delays in the release of official government data and related reports this past year, but the update from EY does shed light on this pressing matter.
EY-Parthenon practice released key research findings from Wave 4 of its Consumer Sentiment Survey, indicating that consumers are increasingly adjusting to the very high cost of living crisis, even as overall financial stress and uncertainty about the foreseeable future lingers on.
One in four or around 25% of consumers are quite concerned about managing their finances long term and have continued to “pull back spending across entertainment, dining, apparel and beauty.”
The survey and related research findings, fielded between February 23 and March 2, 2026 among more than 1,500 US consumers, highlights how households are now managing expenses, shifting spending priorities and “navigating broader economic pressures.”
The latest survey also delves into how the implications of demographic shifts across the US are “transforming consumer products and retail markets.”
Mark Chambers, EY Americas Retail Sector Leader:
“Consumers are finding ways to manage their monthly budgets more effectively, even in a high‑cost environment. With consumer behavior, demographics and labor trends all in flux, retailers are creating more purpose-driven baskets and reviewing their format and location mix to stay competitive.”
Pertinent findings from Wave 4 of the survey are as follows:
- Essential spending rises as entertainment pulls back: Essential purchases such as food and housing continue to drive monthly household budgets upward, with 62% of consumers increasing their grocery spending since December. On the other hand, consumers are increasingly deprioritizing non‑essential purchases: 27% of consumers are paring down spending on entertainment and restaurants.
- AI is increasingly being used as a research channel: As shopping continues to shift toward technological transformation, the data shows that 28% of consumers are using AI chatbots for purchase research, highlighting AI’s emerging role as a tool for consumer decision‑making.
- Consumers across income levels continue to seek value: Consumers are about as likely to switch to a more affordable store as they are a different brand, leading to an upswing in traffic to everyday low price (EDLP) and dollar stores, reflecting a continually heightened willingness to abandon traditional loyalties as price sensitivity becomes a defining behavior.
Will Auchincloss, EY-Parthenon Americas Retail Sector Leader:
“As consumers shift spending to manage financial pressure, value remains the top priority across income groups. AI is changing how people discover, evaluate and buy, but it’s not a strategy on its own. Retailers need to use it in ways that improve the shopping experience, strengthen value and keep them relevant with customers.”
Methodology
Wave 4 of the EY-Parthenon US Consumer Sentiment Survey includes responses from 1,500 US consumers.
Survey topics reportedly include the following key themes: personal financial confidence, spending and savings behavior, category-level spending trends, retail traffic, channel preferences, artificial intelligence (AI) usage and broader macroeconomic sentiment.
The survey shared by EY is carried out on a bimonthly basis.
