What: As consumers increasingly seek bargains, Walmart and other budget-friendly retailers are benefiting from this trend, while Macy's, with its higher price points, faces challenges despite efforts to revitalize its stores.

Why it is important: The shift in consumer behaviour towards trading down highlights the pressures on mid-tier retailers like Macy’s, which struggle to compete on price with big-box stores and fast-fashion brands. This trend underscores the importance of strategic positioning, where budget retailers gain ground, and more premium brands must innovate or pivot to maintain their market share.

In a market where consumers are increasingly trading down to find better bargains, budget retailers like Walmart are seeing revenue growth, reflecting their ability to capture cost-conscious shoppers. Conversely, Macy's is working hard to reverse its decline by refreshing stores and improving its merchandise mix, but it faces a tough battle against lower-priced competitors. Amer Sports, another company in the retail space, is also trying to capture more market share by expanding its direct-to-consumer channels and boosting brand visibility, particularly with brands like Arc’teryx and Salomon. However, its success may be tempered by economic slowdowns in key markets like China.

Retailers winning as customers trade down