The Value-Seeking Consumer: Trade-Down and Traffic

Introduction

The value-seeking consumer is not one person. The same household may buy a store-brand cereal, skip a fast-food lunch and still pay up for a premium coffee. What has changed is how widely the hunt for value has spread: across income groups, across categories and across channels, from grocery aisles to drive-through menus.

The clearest measure is in grocery. US store brand sales reached a record $282.8 billion in 2025, with a record 21.3% dollar share and 23.5% unit share, according to the Private Label Manufacturers Association's report of Circana data for the 52 weeks to 28 December 2025. This article covers where shoppers are trading down, how restaurants are competing for stretched customers, what the data say about the split between affluent and lower-income buyers and what it all means for bankers.

Unit Share vs Dollar Share

Unit share is the percentage of items sold in a category that belong to a given brand or group of brands; dollar share is the percentage of sales value. Store brands' unit share is higher than their dollar share because they sell at lower prices, so the gap between the two measures shows how large the price discount is.

Store brands grew faster than national brands on both measures. The PLMA figures show store brand dollar sales up 3.3% against 1.2% for national brands, and store brand units up 0.6% while national brand units fell 0.6%.

The unit figures matter most. Total units sold across all outlets fell 0.4%, so national brands' dollar growth came from price and mix, while store brands won actual volume. That pattern is the signature of trade-down: shoppers are not buying more in total, they are moving a fixed basket toward cheaper options.

Retailers have also made store brands easier to choose. Many now run tiered programs, from opening-price basics to premium lines that compete on quality rather than price alone, so a shopper trading down no longer has to accept an obviously inferior product. Once a household has tried a store brand it is satisfied with, it often keeps buying it after budgets recover. How retailers build store brands and where national brands hold their premium is explained in private label vs national brands: who wins.

Where the gains came from

The gains were broad. By dollar sales, refrigerated store brands rose 6.1%, beverages 4.8% and pet care 3.7%; by units, pet care led at 5.4%, followed by liquor at 4.4%. Beauty store brands also grew dollar sales, by 2.8%. These are not only the basic commodity categories where store brands have long been strong, which suggests shoppers are accepting store brands in more of the basket.

Guest Counts

The number of transactions or visits at a restaurant over a period, often called traffic. Same-store sales growth splits into guest counts and average check, and growth driven by check while guest counts fall suggests price increases are doing the work rather than more customers.

Restaurants have felt the value-seeking consumer most directly. On its third-quarter 2025 call, McDonald's chief executive Chris Kempczinski described a bifurcated consumer base, with fast-food traffic from lower-income consumers declining nearly double digits in the quarter, a trend that had persisted for nearly two years, while traffic from higher-income consumers rose nearly double digits, according to the earnings call transcript. He said he expected the pressures to continue well into 2026.

The response was a value war. McDonald's relaunched discounted Extra Value Meals and co-invested in the price reductions with franchisees for a period. The results show how hard it is to buy back traffic. In the second quarter of 2026, McDonald's US comparable sales rose 0.8%, driven by higher average check, including favorable product mix, partly offset by negative guest counts, according to McDonald's results release.

The cost of discounting

Discounting is expensive in a franchise system. The brand owner earns royalties on sales, while the franchisee bears most of the food and labor cost, so a deal that lifts traffic but cuts check can leave the franchisee's margin worse off even when system sales hold up. That is why value programs are often co-funded by the franchisor and why franchisee profitability is a constant topic in restaurant diligence, as explained in the franchise model: royalties, franchisees and refranchising.

Not every chain chose to discount. Chipotle reported comparable restaurant sales up 2.1% in its third quarter of 2026, with transactions up 0.8%, its third consecutive quarter of positive transaction growth, while its restaurant-level margin fell to 23.3% from 24.5%. Chains that hold price must still find other ways to win the visit, through menu innovation, speed or convenience.

Value-seeking is not confined to lower-income shoppers. Walmart, a major beneficiary of trade-down, reported US comparable sales excluding fuel up 2.6% in the quarter to 31 July 2026, with transactions up 1.5% and e-commerce sales up 24%, and cited broad-based share gains, according to Walmart's results release. In earlier quarters, Walmart said higher-income households led those gains, drawn as much by delivery speed and convenience as by price, a pattern discussed in premiumization and trade-down in consumer demand. Value formats, from clubs to dollar stores and off-price, are covered in value retail: clubs, dollar stores and off-price.

Is the consumer really K-shaped?

A popular description of the US consumer is K-shaped: affluent households spending freely while lower-income households cut back. The data are less clear-cut than the headlines. A review by the Federal Reserve Bank of Minneapolis, published in March 2026, compared the main sources.

The Minneapolis Fed concluded that the available data do not align to tell a clear K-shaped story, and suggested that wealth, rather than income, may explain spending at the top. For bankers, the point is that the split is real in some businesses, such as fast food, but the size of the divergence depends heavily on the measure used.

The value-seeking consumer changes what bankers look for in diligence and how they frame equity stories. Buyers test a brand's price gap to store brands and how much volume it lost when the gap widened, how dependent recent sales are on promotions, and whether traffic is growing or check is doing all the work. Restaurant buyers look at franchisee economics under value programs, and retail buyers at which income cohorts are driving share gains, using the panel and card sources covered in consumer data: scanner, panel, card and foot traffic.

Valuation follows the same logic. A brand that has held volume against store brands without heavy promotion has shown pricing power, and buyers pay for it; a brand whose sales growth is all price, with falling units, is treated as more exposed, because the next round of trade-down could cost it share it never wins back.

Looking ahead

Several forces will keep value-seeking in place. Cuts to nutrition assistance and restrictions on what benefits can buy press on lower-income grocery budgets, with the new state cost share for SNAP benefits not starting until fiscal 2028, as covered in GLP-1 drugs, food policy and changing food demand. Tariff costs keep pressure on shelf prices, and restaurant chains must decide whether to keep funding value menus or let traffic fall. Businesses that win in this environment are those offering a clear value proposition at their price point, whether a retailer's store brands, a value menu that franchisees can afford or a brand whose quality justifies its premium, and those are the clients and targets bankers should expect to command the strongest interest.