Caution as Strategy: Winning When Consumers Trade Down.

Smaller baskets don’t mean collapse, they signal a reallocation of spend.

Reading the Signals of Caution

The first half of 2025 shows consumers worldwide exercising greater caution. Average ticket sizes shrank even as transaction volumes held steady, meaning people are still shopping but spreading spend more thinly.

In the U.S., the lowest income groups saw the sharpest deceleration after reductions in government support, while financial centers like London and the U.S. Northeast posted the weakest regional growth.

For brands, this is not a signal of collapse but a cue to shift strategy: smaller baskets reflect a desire for consistency, not withdrawal.

Trading Down, Not Opting Out

Cautious households are rebalancing rather than abandoning purchases. Data shows growth in categories that deliver repeated value and emotional payoff at lower price points. Arts & crafts, books, toys, and consignment all posted meaningful gains.

These “intentional indulgences” allow shoppers to maintain moments of enjoyment without the risk of big-ticket spending. Retailers that rely on one-off, high-cost items risk being sidelined, while those offering affordable, durable options are positioned to capture loyalty.

Where the Growth Is Hiding

Pharmacy services, telehealth, and point-of-sale lending were among the fastest-growing subindustries in H1 2025, with spend growth of +36%, +30%, and +29% year over year respectively.

Consumers are reallocating budgets toward categories that support well-being, financial control, and future planning.

The UAE illustrates how this shift is playing out regionally. The telehealth services market there generated USD 244.8 million in 2023 and is forecast to reach USD 2.14 billion by 2030, a 36.3% CAGR that mirrors global momentum.

Pharmacy spending shows a similar trajectory: the UAE market stood at USD 4.3 billion in 2024 and is projected to double to USD 8.15 billion by 2030, growing at 11.2% CAGR.

Even e-pharmacy is expanding, with expected 15.2% CAGR through 2030, driven by digital adoption and regulatory support.

These numbers prove that wellness and accessible healthcare are becoming embedded in consumer spend priorities.

Turning Caution into Advantage

Brands can treat consumer caution as a constraint or as a platform for strategy. Those that diversify assortments, expand lower-ticket SKUs, and emphasize high-value durability will not only weather slower spend growth but also build stronger ties with customers who feel their needs are understood.

This is how loyalty is earned in cautious markets: by aligning with consumers’ instinct to spend less per purchase while still giving them reasons to keep returning.

Bottom Line

Caution is not retreat. It is a recalibration of how and where consumers spend.

Brands that meet this moment with practical, lower-ticket, high-utility offerings will capture both share and trust, converting short-term caution into long-term advantage.

Source: Consumer Edge - Consumer Outlook Mid-Year 2025