Consumer spending… growth could slow in 2026

Executive summary

This week’s Insight Brief from Marketing Insights reveals that Moody’s expects real consumer spending growth to cool to roughly 1.5% in 2026 as affordability pressures, softer hiring, and slower wage gains make shoppers more cautious. For local advertisers, that means “value” messaging will matter more—but value increasingly means clarity, choice, and convenience, not just lower prices. Brands with tiered offers and friction-reducing experiences (easy booking, fast fulfillment, transparent pricing) are better positioned to win share as consumers comparison-shop harder. For local media sellers and agencies, the opportunity is to sell trusted reach and consistent presence that provides reassurance and makes decision-making easier when buyers feel uncertain.

When the consumer slows down, “value” becomes the new prime time

The American consumer isn’t expected to slam on the brakes in 2026—but the forecast is for a noticeably gentler pace. Moody’s Ratings is projecting real consumer spending growth of about 1.5% next year, down from recent strength, as households grow more cautious and affordability pressures linger. Retail and consumer durables are flagged as most exposed if shoppers tighten their grip on discretionary purchases.

For local media sellers and ad agencies, this isn’t an abstract GDP story. It’s a creative brief. A slower-spending consumer doesn’t stop buying; they simply become harder to persuade, quicker to compare, and more allergic to waste—of time, money, and effort. That changes what messaging works, which categories lean in, and how advertisers evaluate “performance.”

The economy may be fine. The mood may not.

Moody’s isn’t calling for a collapse in household fundamentals—especially if unemployment stays stable. But the firm points to a softening labor market and cooling wage gains as key forces that could erode consumption growth and push spending into a more measured rhythm.

At the same time, consumer sentiment has slipped, and shoppers are increasingly “value hungry”—which is less about coupon-clipping and more about a broad shift in buyer psychology: prove it to me.

That “prove it” mindset is already visible in retail behavior. Deloitte’s 2025 holiday survey found consumers planned to pull back spending, expecting to spend $1,595 on average (down 10% from 2024)—with majorities saying they expect higher prices and a weaker economy next year.

The winners aren’t just cheaper. They’re clearer.

In an environment where households feel stretched, Moody’s argues that companies with multi-tiered pricing—and those aligned with value and convenience—are positioned for better outcomes.

That framing matters for local advertisers because it suggests the competitive advantage isn’t simply “discounts.” It’s choice architecture: good/better/best, basic/premium, bundle/à la carte, “get it today” vs. “save more later.” The marketer who makes the decision easy often beats the one who makes it loud.

Dollar Tree’s own messaging reads like a case study in that strategy. In its Q3 fiscal 2025 release, CEO Mike Creedon credited the company’s multi-price approach with momentum, while emphasizing that 85% of the assortment is priced at $2 or less—a blend of reassurance and expanded selection.

And the trade-down effect is no longer confined to low-income shoppers. CFO Brew reported that Dollar Tree cited millions of new households shopping there, with a significant share coming from higher-income brackets—a sign that “value” has become socially acceptable again, even trendy in its own frugal way.

What this means for local media sales and agencies

In a slower consumer-spending year, local advertisers don’t stop marketing—they get more demanding about what marketing does. That creates two simultaneous realities for sellers:

More scrutiny: CFOs and owners ask tougher questions, shorten leashes, and pressure agencies for proof.

More opportunity: Brands that stay visible while competitors hesitate often gain share—especially when the audience is actively re-evaluating where they spend.

Here are the practical shifts likely to show up in your market:

1. “Value” becomes the universal message—even for premium brands.

Value isn’t always “cheap.” For hospitals, it’s “transparent billing and fast scheduling.” For auto dealers, it’s “service specials and certified peace of mind.” For home services, it’s “fixed pricing, financing, and no-surprise guarantees.” When budgets are tight, the premium brand wins by justifying the premium—clearly and repeatedly.

2. Creative that reduces friction performs.

Moody’s highlights convenience alongside value. That’s a flashing sign for campaigns built around: online scheduling, curbside pickup, same-day delivery, “text us a photo for an estimate,” “book in 60 seconds,” “in-stock now.” Your pitch isn’t just impressions—it’s fewer steps between interest and purchase.

3. Expect more “tiered offer” advertising.

If multi-price strategies are advantaged, advertisers will want media partners who can help present tiers elegantly:

• Bronze/Silver/Gold packages
• Bundle-and-save vs. single purchase
• Entry offer to get the first visit, upsell later

This plays well in high-frequency local channels (radio, digital video/CTV, newsletters, social, local print) where repetition builds comprehension.

4. Defensive categories will lean harder on trust.

Moody’s notes healthcare costs—deductibles and copays—pressuring budgets, along with other essentials like utilities and property taxes. When consumers feel squeezed, they become more risk-averse. The brands that feel safe win. This is where local media’s credibility is a selling point: context, community presence, familiarity, and “I’ve heard of them” matter more when people are wary.

A simple way to position your media plan in 2026

If an advertiser asks, “Why should we spend if consumers are slowing down?”  The answer is Because a cautious consumer doesn’t buy less information—they buy more reassurance.

In that world, local media that can deliver (1) consistent reach, (2) high trust, and (3) clear value messaging isn’t a nice-to-have. It’s the mechanism that turns hesitant demand into confident action.

Source: Retail Dive

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