Retail planners have had to manage increasingly challenging consumer behavior trends in the post-COVID landscape. In 2026, the ‘K-shaped economy’ has come to the fore as a way of describing a set of consumer spending patterns that are causing significant shifts in retail strategies across verticals.
Inflation persists and may worsen
A persistent post-COVID theme has been inflation, often driven by energy price rises thanks to regional conflicts. That is now true again, with CPI inflation peaking at 4.2% in May 2026, with potential for further peaks later in the year.
This puts even more pressure on consumer spending as their essential goods cost more, further limiting their discretionary spending.
What is the K-shaped economy?
The K-shaped economy refers to the notion that a minority of households and businesses with higher incomes, greater access to capital and deeper reserves are responsible for a disproportionate share of growth and spending in the economy. Those not in this group are less likely to spend and more likely to reduce their expenditure.
Specifically with regard to consumers, there’s plenty of evidence of a K-shape trend. According to Moody’s, the highest 10% of US earners were responsible for almost half of 2025 consumer spending.
From the high-level data, which shows consumption remaining steady, consumer sentiment data looks odd – why are consumers reporting concerns but still spending? But factoring in the K-shape gives us a clearer picture. The most secure consumers are buoying up the overall figure, and many consumers are changing habits in response to their less secure financial status.
Consumer confidence is shaky
It’s not just happening in the US. Worldwide, the OECD consumer confidence index in May 2026 showed consumers were the most pessimistic they have been since July 2022-January 2023, which was the lowest mark in the index’s history.
In the US, store closures reflect retailers’ conservatism about the economic environment. Weak consumer confidence is forcing retailers globally to trade margin for volume through persistent discounting and cost-cutting, leading to compressed profits, bloated inventories, and higher closure rates.
Consumer expectations are rising even as sentiment sinks
Blue Yonder survey data reveals that 73% of retail supply chain leaders agreed that their customer is becoming increasingly demanding.
Consumer expectations are higher than ever, with convenience a particular driver of new habits. Convenience-first models like curbside pickup are growing, with buy/reserve online pickup in-store (BOPIS/ROPIS) transactions up 7.5% year-on-year.
At the same time, brand loyalty is eroding. 53% of shoppers said they would switch brands after just one bad experience, highlighting the high standards retailers are increasingly held to.
Cost-consciousness causes pricing pressure
Value-hunting is driving traffic to off-price and thrift retailers. Thrift-store foot traffic jumped ~11% year-over-year in the crucial week before Christmas 2025 and off-price retailers were up ~85% in seasonal visits.
Even dumpster-diving now has a niche in social media algorithms. The thrill of a discovered bargain is pushing new kinds of consumer behavior, illustrating just how much pricing pressure there is on non-discount retailers.
So what are retail planners able to do about all of this?
Strategies for planning through consumer behavior shifts
Getting data aligned is critical
Planning around consumer behavior shifts is a test of a retailer’s ability to incorporate, unify and analyze data, from inside and outside the business, whether that’s customer loyalty and shopper data, store data by region, or external demand and buyer trends.
Having a single source for consistent data availability and utilization means every function can leverage that data to develop responses and plans for the changing consumer environment, helping retailers get to market faster.
Mapping product and pricing strategies to changing markets
Merchandise planners can sometimes lack the market visibility to make effective decisions and struggle to scale those decisions across their products. Having demand data accessible in near-real time helps them to make the right decisions, and unifying planning into a single platform means those decisions propagate much faster, rather than transferring across systems and functions slowly.
That interlinking to the rest of the planning functions also allows teams to unite financial strategy with location and spacing decisions, ensuring that trends are captured in plans and promotions.
Scaling local assortments
Retailers are increasingly designing store-specific product mixes, at scale. To do this, they’re combining product data with store- and channel-specific requirements, based on insights from across the network. That helps them to deliver the localized experiences consumers want, based on predictive product performance and local demand.
Consistent and connected shopping experiences across channels
Space planners and category managers are deploying localized, space-aware assortments seamlessly into store-specific planograms and floor plans, translating macro strategy into local targeting that meets customers’ changing needs.
Leaders are producing assortments and space plans concurrently, not sequentially, in a system designed to flow these processes together, saving valuable time and resource.
Inventory planning that accounts for uncertainty
Retailers with sophisticated inventory planning capabilities are using visibility of the entire network (including returns) to adjust replenishment and align to inventory fluctuations on the fly, rather than sticking to pre-prepared replenishment plans regardless of actual performance. That means adaptability as predictions become reality, ensuring the business is always aligned with financial outcomes rather than outdated plans.
Teams are also using scenario planning to model changes in consumer behavior, understanding the actual impact across a full retail network and across their sales channels. They can then evaluate potential responses before shifts occur, so that when consumer behavior changes hit the market, they already have a plan in place.
The K-shaped economy and its associated impacts are here to stay. Retailers with unified data and truly connected planning functions are able to model consumer shifts before they hit, making the right decision faster. They will be best placed to protect margin and meet rising expectations.
