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A Tale of Two Economies
In today’s split economy, consumer behavior looks very different depending on household income. For marketers, this makes clear brand architecture, audience-specific messaging, and distinct premium, mid-tier, and value strategies more important than ever.
While overall consumer sentiment is at its lowest level since the University of Michigan began measuring it, and news headlines lead with the impact of tariffs and high gas prices, not all Americans are feeling the pinch. It is the tale of two economies.
In this bifurcated economy, high-income households are doing very well. Representing just over 20% of households, wealthy Americans accounted for over 57% of consumer spending in 2025. The stock market is still at an all-time high, their home values remain high, and most are locked into lower interest rates, so an extra dollar at the gas pump is not reducing their discretionary spending.
Even middle-class households are not as impacted as others. While only representing 30% of consumer spending, they are still buying but making more deliberate decisions, often choosing products based on reliability, brand loyalty, flexible financing and energy savings. Some economists are calling this the “K” shaped or “E” shaped economy, further drawing the difference between affluent buyers, the middle class, and lower-income households.
Lower-income households have seen stagnation in wages, are more likely impacted by downsizing in the labor market, and most are living paycheck to paycheck. The increase in food and fuel prices is forcing many buyers to stick to the basic necessities and cut out any discretionary purchases.
For marketers with multiple product lines, now is the time to audit brand architecture and messaging to ensure your go-to-market strategy has a clear benefit for each audience, preventing your distinct premium/mid-tier/value lines from cannibalizing each other. This may mean selecting different creative messaging as well as different communication channels depending upon which audience you are targeting and where they are spending their media time.
For many of our home products and CPG clients, they have begun to delineate their offerings and continue to introduce new products in premium or value segments. Promotional pricing and free shipping offers have been reduced, and value or bundle pricing has increased to drive higher purchases.
If you would like a free audit of your brand architecture, feel free to contact us. We are happy to get All In Your Business™ and find the right opportunities to grow your revenue.
Sources: University of Michigan Consumer Sentiment Index (April, 2026), Bank of America Institute Consumer Checkpoint, Feb 2026; CNBC 'E-shaped economy' analysis, Mar 2026
