Consumer spending stayed resilient in Q3, but widening gaps between high- and low-income households reshaped retail performance, with affluent shoppers driving growth while budget-constrained consumers cut back. Bank of America data shows most spending momentum came from middle- and higher-income groups, reflected in retailers’ earnings: Williams-Sonoma saw premium demand lift margins, while Pottery Barn lagged; off-price chains thrived as value-seeking surged; and Walmart and Amazon gained share as Target struggled with discretionary softness. Overall, the data points to a sharply diverging retail landscape heading into a holiday season poised to favor mass and off-price merchants.

High-income consumers are more likely to discover new brands or products in-store, but they typically make the final purchase online.

The US consumer is holding up, according to Walmart: The retailer raised its full-year outlook after solid spending from value-seeking shoppers drove it to a Q2 earnings beat—although it warned of uncertainty heading into election season.

Walmart’s market share gains continued in Q1 as the retailer emphasizes value and convenience: The company continues to draw in more high-income shoppers, while its advertising and marketplace offerings boost revenues.

Inflation drives high-income consumers to trade down—and up: Affluent shoppers are spending more at Walmart and Aldi, but a strong dollar is keeping luxury demand robust.