Over the past few years, consumer behavior has been defined by resilience and adaptability. In response to inflation, pandemic disruption, and geopolitical uncertainty, shoppers became what we might call “strategic optimizers,” marked by agile spending and value-driven choices: switching brands, chasing deals, buying in bulk, and leaning heavily into private-label products.
But according to Kearney’s Consumer Stress Index for the first quarter of 2025, that phase may be coming to an end. While stress levels among U.S. consumers appear largely unchanged from the previous year, this apparent stability conceals deeper economic fatigue. Financial flexibility is eroding and many households are approaching the outer limits of what they can cut back on.
The margin of no return
What Kearney flags in the data as a red herring is particularly telling: fewer people report worrying about affording food, but this doesn’t mean they’re thriving. On the contrary, it signals that they’ve already changed how they shop. As the report notes, many households have “already made significant adjustments” to their grocery spending, leaving little room for further belt-tightening if prices continue to climb.
In addition, tariffs now present a looming threat. With new duties expected to raise the cost of imported goods—from packaging materials to finished products—these added expenses could push consumers from careful budgeting into full-blown cutbacks.
Pressure is mounting. By the first quarter of 2025, 54% of U.S. consumers expressed personal concern over global trade disputes—up from just 36% six months earlier. More than half the population is bracing for economic fallout from policy decisions beyond their control. If inflation ticks up again, even modest price hikes could trigger a fresh wave of behavioral regression: delaying purchases, skipping essentials, or abandoning entire product categories altogether.
The hidden costs in grocery retail
Of all the sectors shaped by the affordability crisis, few are as exposed as grocery retail. Here, price sensitivity is the defining force behind consumer behavior. As Kearney explains, shoppers have already optimized nearly every aspect of their grocery routines by trading down to budget brands, eliminating non-essentials, buying in bulk, and fully embracing store brand alternatives.
But that flexibility is running out.
Even in categories where products are produced domestically, grocery retail is far from insulated. Behind the shelves, critical cost drivers like packaging materials, agricultural inputs, processing equipment, and in-store logistics often rely on global supply chains. With tariffs poised to increase the cost of many of these components, retailers will face mounting pressure to pass those costs on to shoppers.
That means even pantry staples are at risk of becoming noticeably more expensive. And when basic items like rice, pasta, or canned goods hike up in price, the entire affordability equation breaks down. And for many households, the usual coping tools simply won’t stretch far enough.
If value-led grocery has been the backbone of consumer resilience over the past two years, it now faces its toughest test yet. The cushion is gone, and what remains is a thin line between adaptation and sacrifice.
Inside Saudi Arabia’s value-led grocery boom
The transformation of consumer behavior is especially evident in Saudi Arabia. The Affordability Imperative report by Oliver Wyman, in collaboration with the RLC Global Forum, paints a clear picture: affordability is now a foundational requirement for the Kingdom’s grocery retail landscape.
In 2024, 31% of Saudi households saw their income decline, with over 10% reporting drops greater than 50%. Meanwhile, 40% reported depleted savings. As a result, 48% now compare prices when shopping, and 46% actively seek out retailers known for lower prices.
This pivot is creating major growth potential for value-led grocery formats. Interest in discount grocery concepts is exceptionally high: 68% of consumers say they would shop at discount retailers if available, and a staggering 97% of those familiar with international value leaders like Aldi and Lidl say they would shop from those brands in Saudi Arabia if given the chance.
In a market once dominated by legacy brands and traditional shopping habits, the rise of value-led grocery is a structural reset. For grocery retailers, the message is clear: value is non-negotiable.
Asia: Value and convenience on a collision course
Across Asia, consumer behavior in grocery retail is being reshaped by a dual demand for value and convenience. Inflationary pressure has made shoppers more price-conscious, while the rise of digital retail has changed how and where they search for affordability.
In markets like China and Singapore, omnichannel habits are accelerating. According to NielsenIQ, shoppers are actively blending in-store and online formats—driven by value, not just convenience. In China, this shift is embodied by Freshippo, Alibaba’s tech-enabled grocery chain, which fuses real-time pricing, curated assortments, and rapid delivery into a seamless value-driven ecosystem.
Similarly, NTUC FairPrice in Singapore has refined its appeal with digital loyalty programs and budget-friendly private labels, maintaining relevance with middle-income and cost-conscious consumers alike.
With Asia-Pacific e-commerce expected to reach $2 trillion in 2024, the region’s grocery sector is being redefined by shoppers who are digitally fluent, hyper-selective, and always in pursuit of the best deal, regardless of channel.
Europe’s grocery market: Discount and premium rule
Europe’s grocery retail landscape is no longer defined by a single shopper mindset. According to The State of Grocery Retail Europe 2025, grocery sales across the region are forecast to grow by 3.0% this year—just ahead of projected food price inflation at 2.3%. While that suggests a fragile return to real growth, it also masks widening structural divides in consumer behavior.
At one end of the spectrum, discounters like Aldi are gaining traction, especially in markets such as Germany, Spain, and Poland. With their continued focus on private labels—now accounting for 39.1% of total grocery sales across Europe—discounters have become a default choice for value-conscious households. Private label loyalty also appears locked in: 84% of consumers say they would stick with store brands even if their purchasing power improved.
But this is not the whole picture. In Western Europe, premium players are gaining ground. Waitrose, for example, saw sales rise 4.4% to £8.0bn, with volumes up 2.6%, as it catered to higher-income shoppers through a focus on quality, provenance, and sustainable sourcing, demonstrating that value can also mean ethical assurance and product integrity.
This polarization demands new precision from brands. Affordability still matters, but it no longer means the same thing to everyone. Success now lies in precision. In understanding which value story your audience wants to hear and delivering it without compromise.
What this means for brands
The shift from optimization to sacrifice has profound implications for both retailers and manufacturers. First, it redefines what “value” actually means. Not as a pricing tactic, but as a system-wide commitment. Today, true value must be embedded across pricing, packaging, supply chain, and customer communication.
Value-led grocery models are setting the pace. Private-label sales in Europe now make up almost 40% of grocery spend. In Asia, digital-first retailers are building omnichannel ecosystems around price transparency and convenience. In the GCC, the demand for affordability is even more pronounced with nearly half of consumers actively seeking out low-price retailers.
What we are witnessing in 2025 is a foundational reset in consumer behavior. The age of optimization gave consumers a sense of control. The age of sacrifice is marked by a recalibration of what matters most.
