The news: There are growing signs that consumers across the income spectrum are feeling squeezed, making them more deliberate about where and how they spend.

• Costco’s US monthly comparable sales, excluding the impact of changes in gasoline prices, grew 5.6% YoY in August, the fourth straight month of decelerating growth and the smallest increase since February, as shoppers prioritized essentials.
• Convenience and gas station retailer Alimentation Couche-Tard CEO Alex Miller said consumers purchased fewer gallons on average during the most recent quarter and were “more deliberate in what they put in their baskets,” which weighed on sales of packaged carbonated soft drinks and center-store categories like salty snacks and packaged sweets.
• Lowe’s CFO Brandon Sink noted that “affordability remains kind of the major concern,” leading shoppers to prioritize repairs and maintenance while deferring larger, discretionary home improvement projects.

The context: The broader spending data tells a similar story. Consumers are paying more but buying less as higher prices mask weaker underlying demand, per the August Fiserv Small Business Index, which tracks point-of-sale data across about 2,000 US small businesses.

• Sales rose 1.3% YoY, but those gains were entirely driven by a 3.0% increase in average ticket, while transactions fell 1.8%.
• Higher essential costs are also crowding out discretionary purchases, as gas station sales jumped 15.1%, while food and beverage sales fell 1.4%.

And relief isn’t on the horizon. The national average gas price reached $4.14 on September 3, up 29.9% YoY and well above the previous record for Labor Day of $3.82, set in 2012, per AAA.

Implications for retailers: These spending patterns point to growing anxiety about the economy. That aligns with the University of Michigan’s consumer sentiment index, which shows shoppers are worried about both their own finances and a broader economic slowdown.

Few retailers are immune. Even Costco, which caters to a relatively affluent customer base, is seeing sales growth decelerate as shoppers become more selective.

With consumers thinking harder about every purchase, retailers need to make their value easy to see and understand. Targeted promotions, bundles, and loyalty offers can help shoppers stretch their budgets while putting less pressure on margins than broad-based price cuts.

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