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As polarization in the economy increases, people with more resources feel they can spend more on food, while those with fewer resources are spending less on food, according to NielsenIQ research shared by FMI.
Shoppers at the lower end of the income spectrum continue to struggle under the weight of higher prices while wealthier people increase their spending, creating a dynamic in which wealthier consumers increasingly dominate grocery spending in the U.S., panelists said in an online webinar hosted by the Food Industry Institute (FMI) on Tuesday.
According to NielsenIQ data presented during the session, 40% of financially well-off shoppers said they plan to spend more on groceries in 2026, compared with 23% of less financially well-off shoppers.
“There is generally an attitude among struggling groups to spend less,” Jack O’Leary, director of e-commerce strategy thought leadership at NielsenIQ, said during the session. “And among thriving groups, there is a reality and awareness that they may need to spend more in certain categories, and there are very few categories where they can simply spend less in the next few years.”
Additionally, higher-income shoppers tend to buy fresh food, while those with less money often spend their grocery spending on shelf-stable products, NielsenIQ found.
According to data released by O’Leary, shoppers with household incomes above $150,000 are particularly drawn to fresh fruit, beverages, vegetables and meat, and have seen significant increases in spending in those categories. Meanwhile, people making less than $50,000 are cutting back on purchases in some areas, even basic necessities like baking supplies.
“I think the key challenge for those in the industry – retailers and brands – is how we can better market to consumers and potentially reinvigorate unit growth among low-income groups,” O’Leary said.
Steve Markenson, FMI’s vice president of research and insights, said people struggling to make ends meet not only face financial pressures today, but they also tend to indicate worsening economic circumstances. Markenson cited data from FMI’s December Buyer Snapshot, which found that more than three-quarters of them said their household finances were weaker than a year ago, while nearly 90% of those who said they were financially comfortable said their financial situation was the same or better.
The increasing bifurcation of the economy is creating what economists call a K-shaped recovery. That is, people with more resources feel like they can spend more, and people with fewer resources spend less. The economy is moving in this direction, O’Leary said, even though inflation has cooled noticeably over the past few years.
The annual inflation rate for the four years through November 2025 was 4.5%, well above what the Fed considers healthy, he noted.
“The fact that this fighting group is still identifying some of these inflation points as concerns suggests that while inflation may be slowing down a bit, it is still having a meaningful impact,” O’Leary said.
NielsenIQ data shows warehouse clubs are increasing their share of food spending across income groups, especially among higher income groups. These retailers saw more than a third of growth among shoppers with household incomes of $150,000 or more, representing a share gain of more than 2%. Among those making less than $50,000, the retailer saw 6% growth, leading to a 1% share increase.
By comparison, grocery stores lost market share in both income groups, NielsenIQ data shows.
