The New Faces of Value: Trade-Down Reshapes Retail in 2025.
Economic pressure pushes middle and younger consumers into value formats.
Economic Pressure, Shifting Choices
General merchandise retailers entered 2025 facing persistent inflation, muted wage growth, and erosion in discretionary spending. These forces have reshaped how consumers allocate budgets.
Consumer Edge data confirms that basket sizes are shrinking and discretionary categories are under pressure, setting the stage for the “trade-down” effect.
What’s changed is its reach: value-seeking is no longer confined to the lowest-income households. Middle-income and younger shoppers are now driving the shift, redrawing the map of who buys value and why.
Middle Income Is Moving
Meijer has become a bellwether of this shift, pulling in new middle-income customers who historically maintained stable discretionary spend.
This migration signals that value formats are not just safety nets for the cash-strapped; they are now viable options for households that once anchored mid-market retail.
For rivals, this raises the stakes: if mid-income loyalty pivots toward value-driven formats, it undermines the assumption that mainstream players can hold this demographic without sharper pricing and assortment strategies.
Younger Shoppers Redefine Loyalty
The report also highlights how younger consumers are leading the search for value. Unlike older generations, their engagement with value formats looks less like a temporary adjustment and more like a behavioral baseline. If value becomes embedded as a generational habit, the long-term consequences are profound.
Tomorrow’s core shopper may enter adulthood with loyalty anchored not in legacy mass retailers but in the banners that deliver perceived value consistently across categories.
Older Shoppers Hold Steady
Target, by contrast, continues to lean into its strength with older customers. Familiarity, brand trust, and wide assortments make it the natural choice for consumers less willing to experiment with new value formats. But this reliance on an aging demographic raises strategic risks.
If younger and mid-income segments consolidate their loyalty elsewhere, Target and similar mass retailers risk skewing older over time, leaving them exposed to demographic headwinds.
Regional Parallels in UAE and GCC
The dynamics of trade-down are also visible in the Gulf. Retailers are expanding value-driven formats at pace: LuLu has rolled out new LOT discount stores in Abu Dhabi as part of a 2025 expansion program, underscoring that value is no longer peripheral but central to growth in the region .
Private-label momentum is accelerating as well. At Private Label Middle East 2025, exhibitor participation was up 229% since inception, with Carrefour, Amazon, and Boots all showcasing owned-brand ranges, signaling that value is being engineered into product architecture as much as into pricing .
Carrefour’s extensive footprint across 14 MENA markets provides the infrastructure to scale these strategies, giving the region a platform to normalize value as both an everyday and long-term proposition .
Bottom Line
Trade-down in 2025 is not a passing cycle.
Middle-income and younger consumers are redefining value as a long-term baseline.
Retailers that misread this as temporary will not just lose share, they will forfeit the loyalty of the very demographics that determine the future of general merchandise.
SourcesGulf News — LuLu launches new LOT value store in Abu DhabiPrivate Label Middle East — Exhibitor growth and participation (2025 edition)
Majid Al Futtaim — Carrefour operations across 14 MENA markets Consumer Edge: State of Retail 2025 — General Merchandise
