Discount Decades: A Shrinking Middle Class Reshapes US Retail

Published – October 2026

In the first part of our five-part Discount Decades series, uncover the demographic, financial, and economic forces set to continue fueling US discount and value retail.

Subsequent reports in the Discount Decades series will examine the performance of, and prospects for, discount retailers in these sectors: apparel and footwear; cross-border e-commerce platforms; dollar stores (and similar formats); and grocery.

Discover answers to these and other questions:

• Where do discount formats rank among America’s 25 largest retailers, and how do certain consumer groups drive outsized reach for these banners?
• How is financial strain migrating across age groups, to previously secure consumer cohorts?
• How has value-seeking behavior spread across generations, even as services gain share of discretionary spending?
• What structural demographic and supply-side forces should sustain discount growth, and why do recent format failures show that success isn’t guaranteed?

Data in this report include: US retailer market-share rankings; discount-shopping rates by race/ethnicity; US population growth by ethnicity; student loan debt trends by borrower age; homeownership rates by age group; household income distribution by income class; consumer survey data on saving behavior and generational spending preferences; the split of discretionary spending between goods and services; and US CPI inflation trends.

Introduction

• Defining a Discounter

The Discount Retail Universe and Its Tailwinds

• Putting the Biggest Discounters in Context
• Shopping at the Discounters
• Frugal Forces Are Shifting Older: More Debt, Fewer Housing Assets Among Older Age Groups
• The “Erosion” of the Middle Class
• The Consumer: Prioritizing Value and Services Spend
• Multiyear Inflationary Pressures: Cyclical and Secular
• Supply-Side Expansion and Isolated Challenges

What We Think

The TJX Companies, Dollar General, eBay, Aldi, Temu, Ross Stores, Walmart (including Sam’s Club), Amazon (including Amazon Haul), Dollar Tree, Family Dollar, Five Below, Burlington Stores, Save A Lot, Grocery Outlet, Lidl, Trader Joe’s, Shein, AliExpress, Primark, DSW, Nordstrom Rack, Old Navy, Costco, The Home Depot, Kroger, CVS Health, Walgreens, Target, Lowe’s, Albertsons, Publix, Apple, Ahold Delhaize, Seven & i Holdings, H-E-B, Alimentation Couche-Tard, Best Buy, Meijer, Whole Foods Market, Kohl’s, Macy’s, 99 Cents Only Stores, Big Lots, Boohoo, Debenhams Group, and Action.

Selected Discounters Across Sectors

US: Major Retailers’ Share of Total Retail Sales (%)

US Consumers: Retailers from Which They Have Purchased Food Products in the Prior Two Weeks (% of Respondents)

US Consumers: Retailers from Which They Have Purchased Nonfood Products in the Prior Two Weeks (% of Respondents)

US Population, Selected Breakdown (Thousands)

Federal Student Loan Portfolio by Borrower Age: Value of Outstanding Loans (USD Bil.) and Number of Borrowers (Mil.)

Average Annual US Homeownership Rates by Age (% of Each Age Group That Are Homeowners)

US Income Classes: Share of Population and Aggregate Household Income (%)

US Income Classes: Share of Aggregate Household Income—Trend View (%)

US Consumer Survey: Agreement with Selected Spending Statements, by Age (% of Each Age Group Who Agree)

US Consumer Spending on Major Discretionary Categories: Split Between Retail Goods and Services (% of Total)

US CPI Inflation: Yearly Averages (%)