What: The Visa report highlights how economic pressures and shifting consumer sentiment are driving changes in retail spending, with spending growth increasingly reliant on wealthier shoppers.

Why it is important: The report’s insights align with recent analyses showing that demographic divides and economic pressures are forcing retailers to adapt strategies to maintain resilience.

Visa’s latest report details a retail landscape shaped by declining consumer confidence, job loss concerns, and persistent economic uncertainty. Despite these headwinds, overall retail spending remains robust, largely due to the continued strength of affluent consumers. The report underscores that while many shoppers are curbing discretionary purchases, wealthier segments are sustaining growth, particularly in luxury and value-driven categories. Demographic divides are increasingly evident, with Gen Z and millennials showing more caution in their spending, while older consumers and the mass affluent maintain or even increase their expenditures. Retailers are responding by refining inventory strategies, focusing on operational efficiency, and prioritizing value and well-being in their customer offerings. The interplay between perceived well-being and spending is highlighted as a critical factor, suggesting that retailers must address broader lifestyle concerns to retain consumer loyalty. As economic pressures persist, the sector’s reliance on affluent shoppers introduces new risks, making adaptability and targeted engagement essential for continued resilience.

IADS Notes: The latest Visa report’s findings are strongly echoed by recent industry analyses, which consistently highlight a disconnect between consumer sentiment and actual retail spending. Throughout 2025, sources such as The Economist and Inside Retail documented how US retail sales remained resilient, with holiday sales surpassing $1 trillion despite consumer confidence hitting a three-year low and inflation expectations rising to 6%. This paradox is further explained by the ongoing strength of affluent consumers, who have continued to drive both luxury and value segments, as noted by BoF and The Economist in November and December 2025. At the same time, demographic divides have become more pronounced, with Gen Z cutting back sharply while older generations maintain or increase their spending, as reported by PwC and the Financial Times. Economic pressures, including weak job growth, rising inflation, and policy uncertainty, have forced retailers to adopt leaner inventory strategies and focus on operational resilience, as detailed by Forbes and Alix Partners. Finally, the growing importance of wellbeing and perceived control in shaping consumer outlooks has prompted retailers to prioritize supportive, value-driven experiences, as highlighted by Euromonitor and BCG in early 2026.

Visa report: In the US, employment and affordability pressures could peak