A Two-Track Economy Driven by Income, Assets, and Exposure 

The K-shaped economy reflects a simple but consequential truth: 
Higher-income households are rising, while lower-income households are slipping further behind. 

The quotes grounding this reality—rising wealth at the top, cumulative inflation weighing down the bottom, and uneven recovery across the middle—set the backdrop for a consumer landscape defined by imbalance.  

This imbalance has been years in the making. Multiyear inflation has compounded across staples, with categories like bread, eggs, mayonnaise, beef, and soft drinks experiencing annualized growth rates between 7.3% and 10.6%, materially above the total CPI. Consumers today pay 40%+ more for essential baskets than they did in 2021.  

At the same time, households with stock holdings benefitted from a bull market in 2025 that dramatically boosted financial sentiment at the top but left non-investing households flat or falling. The split is emotional, not just economic. 

And with 2026 tax policy delivering outsized savings to high earners—disproportionate “windfalls” escalating at each higher percentile—the divergence only deepens.  

Their top concerns reveal opposite realities. 

Strugglers worry about basic provisions—food, shelter, job security, rising prices—while Thrivers mention global issues or claim “no concerns at all.”  

This mindset split shapes how they intend to spend in 2026: 

• Thrivers lean toward investments, education, out-of-home experiences, and longer-term wellbeing categories. 

• Strugglers reallocate away from discretionary spending toward essentials like utilities, transportation, and groceries.  

Across nearly every category—discretionary, essentials, long-term goods—Strugglers plan to spend “less” at far higher rates than Thrivers. Thrivers, by contrast, show meaningful intent to “spend more.” The divergence is about more than ability; it’s about confidence. 

Higher-Income Households Are Powering Growth 

The K-shaped split shows up clearly in spending patterns. 

Across total omnichannel sales: 

• Households earning $150K+ represent a growing portion of total sales, rising every year from 2022–2025. 

• Lower-income households (<$50K) have steadily declined as a share of total sales. 

• Both the absolute share and growth rate of high-income spending have accelerated sharply.  

By 2025, the top income tiers are far outpacing all others in spending growth—posting growth rates approaching 20%, while lower-income households decline or remain flat. The middle is holding on, but not closing the gap.  

This is the core of the K-shaped reality: 
Total spending can grow while millions of households retreat. 

Channel Shifts Reflect Economic Polarization  

Channel-level performance mirrors the income split.

Among both the highest and lowest income groups:

• Mass/Amazon and Warehouse Clubs are the biggest winners.

• But the roles differ: Amazon is gaining across all incomes, yet for low-income households it reflects value and necessity, while for high-income households it reflects convenience and omnichannel fluency.

Grocery stores, drug stores, and convenience/gas channels are seeing declines in lower-income shoppers, while higher-income shoppers are diversifying across premium, club, and convenience-enhancing channels. 

Even demographics reveal an omnichannel divide: 

• Omnichannel buyers skew high-income and college-educated. 

• In-store–only buyers skew lower-income, older, and less formally educated. 

• Online-only buyers skew younger and lower-income, reflecting a bifurcation within digital usage itself.  

Digital acceleration intensifies this: 

• Online growth among $150K+ households is nearly 2x the pace of households under $50K. 

• Every income group is shifting online, but the velocity for high-income households has made online one of the largest engines of total retail growth. 

Income Shapes What, Where, and How Americans Buy   

Category-level divergence is also widening. 

High-income households are adding units across fresh categories—fruit, vegetables, beverages, meat, prepared foods—illustrating a trading-up pattern into higher-value, higher-quality food.  

Lower-income households, by contrast, see the fastest growth in: 

• health & performance formulations 

• combination food packs 

• and declines across key baking and pantry essentials, signaling constrained replenishment.  

And yet, one trend transcends income: Private label is accelerating everywhere.

Kirkland, Great Value, Trader Joe’s, Member’s Mark, and other store brands are adding millions of units across both high and low-income families.

Finally, sector-level growth underscores the divergence. 

• For households under $50K, nearly all major consumer goods sectors saw negative year-over-year growth. 

• For households earning $150K+, nearly all showed strong double-digit growth.  

The New Marketplace Reality 

The K-shaped consumer landscape is expanding in every direction—financial, behavioral, and channel-based. Brands and retailers can no longer operate with a single consumer archetype in mind. 

The implications are clear: 

• Affordability must be engineered strategically, not reactively. 

• Premium must justify its existence with real experience, convenience, and quality signals. 

• Omnichannel fluency is now a predictor of spending power. 

• Value perceptions have bifurcated, with one side seeking price efficiency and the other seeking time efficiency. 

• Growth will increasingly pool at the top, unless and until structural pressures on lower-income households ease. 

The K-shaped economy is not a standalone moment. It is the map. And businesses must decide whether they will navigate it with precision or get pulled apart by its divide.