Many lower-priced chains, including McDonald’s and Dollar General, have talked openly about adding higher-income customers during this period of economic strife across the United States.
“We’re pleased to see growth once again in our total customer count, with disproportionate growth coming from higher-income households,” Dollar General CEO Todd Vasos shared during the chain’s third-quarter earnings call.
McDonald’s has seen a similar influx of higher-income customers.
“In the U.S., we continue to see a bifurcated consumer base, with QSR traffic from lower-income consumers declining nearly double digits in the third quarter, a trend that’s persisted for nearly two years. In contrast, traffic growth among higher-income consumers remained strong, increasing by nearly double digits in the quarter,” CEO Christopher J. Kempczinski said during the company’s third-quarter earnings call.
While value chains are gaining higher-income shoppers, analysts note that even affluent consumers are becoming more selective, prioritizing price transparency and everyday value rather than wholesale cutbacks.
Trading down may have helped some chains, but it’s bad news for higher-end retailers, including the Di Bruno Bros. grocery chain, which operates high-end markets. The chain’s owners, Brown’s Super Stores, has opted to close more than half of the upscale chain’s locations.
Even people who have not lost their jobs have been cautious about spending.
“The global personal luxury goods market shrank 2% year-over-year in 2024, according to analysis from the consulting firm Bain & Company. That marks the first contraction in 15 years, apart from a brief downturn in the early days of Covid-19,” Business Insider reported.
“The ‘lipstick effect,’ or the tendency for consumers to indulge in small luxuries or affordable treats during periods of economic uncertainty, has expanded beyond the beauty aisle. Even as 75% of consumers reported trading down in at least one category, 39% of consumers expressed their intent to splurge on a range of categories,” the study showed.
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That’s bad news for chains like Di Bruno Bros., which specializes in higher-end grocery items. The chain, which was founded in 1939, will close three of its five locations, while adding more focus on its online operations.
“By concentrating on these core elements, we believe this is a positive reset that allows us to preserve and elevate the in‑store tradition while growing the brand’s reach in meaningful new ways,” a spokesperson for Di Bruno Bros. told CBS News.
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1939, founded in Philadelphia’s Italian Market: Italian immigrant brothers Danny and Joe Di Bruno open a small cheese and grocery shop on South 9th Street, according to Visit Philly.
1960s, shift toward gourmet cheese and specialty foods: The business pivots away from traditional grocery items as supermarkets expand, focusing on imported cheeses and specialty goods, Zippia reported.
1990, next-generation leadership: Emilio and Bill Mignucci Jr. take over operations and begin modern expansion while preserving the brand’s Italian Market roots, according to the company’s website.
2005, Rittenhouse Square flagship opens: A 10,000-square-foot flagship store opens at 18th and Chestnut Streets, significantly expanding the brand’s reach, Zippia added.
2011, first suburban expansion: The company opens a store in Ardmore’s Suburban Square, marking its move outside Philadelphia proper, according to Delco.Today.
2019, Italian Market bottle shop launches: Di Bruno Bros. opens a wine and beer bottle shop near its original Italian Market location, reported Philly Eater.
2024, ownership and brand restructuring: Jeff Brown’s Brown’s Super Stores takes over operation of physical locations, according to the Philadelphia Inquirer.
Wakefern Food Corp. acquires the Di Bruno Bros. branded products and trademark portfolio, the company shared in a press release.
2026, store closures announced: The company announces the closure of multiple locations, including Ardmore and Wayne, while retaining Italian Market and Rittenhouse stores, according to the Inquirer.
Like many shoppers, I’ve found myself looking at prices more and maybe opting for ground beef over steak, or buying whatever protein might be on sale that day. That’s a caution that many Americans are practicing.
“Price remains a critical factor driving shopper behavior. An overwhelming 75.2% of respondents said the primary reason for choosing one store over another is simple: it offers the best prices,” according to the report.
Some Americans have also traded down to value-based retailers.
“This explains why 36% of respondents switched to dollar or discount stores in 2024, with 66% citing lower prices as their main reason. Many shoppers are also comparing prices before making purchases. Six percent always compare retailer prices, and another 25.8% often do the same,” the data showed.
Some brands have tried to get ahead of the trend by lowering prices on everyday items.
“We’ve spent the past year listening closely to consumers, and they’ve told us they’re feeling the strain,” Rachel Ferdinando, CEO of PepsiCo Foods U.S., said in a press release. “Lowering the suggested retail price reflects our commitment to help reduce the pressure where we can. Because people shouldn’t have to choose between great taste and staying within their budget.”
PepsiCo lowered prices on many of its snack chip brands, including Lay’s and Doritos, by up to 15%.
Related: Burger King brings back fan-favorite Whopper
