Key takeaways

• Middle- and higher-income consumers are increasingly shopping at discount and value retailers like Dollar Tree and Dollar General.
• Inflation, tariffs, and broader economic uncertainty are pushing consumers of all income levels to seek better deals.
• Retailers are rolling out multi-price strategies, enhancing store experiences, and expanding premium offerings.

Lingering price sensitivity drives consumers to seek out deals, boosting value retail growth and shifting loyalty in 2025.

Walmart made headlines last year after reporting a surge in higher-income shoppers.¹ Dollar stores and other value retailers are experiencing a similar trend in 2025 as a growing number of middle- and higher-income consumers seek out deals.²

Dollar Tree reported that households earning at least $100,000 were a “meaningful growth driver” in the first quarter of 2025 as same store sales rose 5.4%.³ The company credits the growth and broader appeal to a wider selection of products and a multi-price strategy — some  items  retail for up to $7, but 85% of its goods are $2 or less.⁴

Dollar General saw a similar pattern in the same quarter. New shoppers in 2025 are visiting more frequently and spending more per trip compared to new customers last year, the company said. The chain is seeing the highest numbers of “trade-in customers” — who would normally shop at higher-priced competitors — than at any other time in the past four years.⁵  

New research from Empower shows a slow but persistent uptick in value-conscious shopping in early 2025, especially at dollar stores. The average monthly spend at dollar stores jumped from $25 in January to $30 in May, a 20% increase.

Stretching the dollar beats loyalty 

The shift underscores lingering cost-of-living pressures from inflation and more recent economic concerns such as tariffs.⁶ A recent McKinsey survey found that 60% of shoppers have changed or expect to change habits in 2025, with 43% switching to lower-priced products and 26% looking to purchase items from different stores or websites.⁷

Five Below — which sells merchandise for kids and young adults primarily in the $1 to $5 range — saw a 7.1 % jump in same-store sales in the first quarter of 2025.⁸ It’s also been expanding its footprint of nearly 1,800 stores.⁹

It’s not just the big names. Citi Trends, an off-price value fashion and home goods retailer, recently discovered that its customer base includes a “significant group” of middle- and higher-income shoppers.¹⁰

It’s been a similar story at Academy Sports & Outdoors, a value-focused sporting goods retailer that operates in about 20 states. The company has seen an uptick in higher-income shoppers beginning in late 2024 and accelerating in early 2025.¹¹

Value retailers broaden appeal 

With more Americans bargain hunting, value-oriented retailers have been looking for ways to expand their appeal among shoppers of all income levels.¹²

Walmart reported strong earnings growth in 2024 thanks to an influx of shoppers with annual incomes over $100,000 buying both essential goods and premium products. The big-box store recently expanded digital and delivery services, remodeled stores, and launched its bettergoods brand of organic, plant-based, and gluten-free foods.¹³

Meanwhile, Amazon has launched luxury partnerships including a new collaboration with Saks Fifth Avenue.¹⁴ It’s also expanded premium offerings in categories like beauty — where sales of brands like Estée Lauder and L’Oreal rose nearly 20% to $15 billion between April 2024 and April 2025.¹⁵

Membership stores are also expanding premium offerings aimed at higher-income shoppers. Costco reported success in early 2025 selling luxury items such as Rolex watches, gold bars, and diamond jewelry.¹⁶

The warehouse club just added more perks for its executive memberships this summer, including exclusive access to stores before they open to other customers. Executive members pay about $130 annually — about twice the standard membership — but made up 73% of Costco’s $250 billion in 2024 global net sales.¹⁷

Read more: Join the club: The economics of membership retail

Retail competition heats up in July 

It’s unclear whether the influx of middle- and higher-income consumers to value retailers will persist. But retailers are hoping to attract and keep those customers with more special deals and events. 

Amazon's Prime Day from July 8-11, 2025, is projected to generate $23.8 billion in U.S. online sales, a 28.4% increase from last year, according to Adobe Analytics. Amazon is offering 18% of its deals this year on more expensive goods like electronics and appliances, as more consumers wait for sales events to “trade up” on discretionary items.¹⁸

Walmart, the largest brick-and-mortar retailer in the U.S., has the same start date for its July online sales event, among several stores offering July discounts including Target, Costco, Dollar General, and Best Buy.¹⁹ The July sales volume has begun to outpace business during the established Black Friday events in November.²⁰

Value shoppers of all income levels are helping fuel the shift as inflation and economic uncertainty make them more willing to alter spending habits, shift brands and store loyalties, and seek out the best deals.²¹  

Empower research shows that 53% of consumers have switched to a generic brand in the past year to save money, while 34% downloaded a store’s app for rewards/coupons and 21% purchased a store membership to get benefits like free shipping.

As value-driven behaviors persist, retailers are finding it more important than ever to recognize emerging spending trends from all types of consumers.

Read more: Stagflation talk is picking up. Here's what driving the conversation