Shoppers aren’t cutting back — they’re cutting deals

The age of conspicuous consumption has given way to the age of conspicuous thrift. The brag isn’t what you bought, it’s what you didn’t pay. Shopping in 2025 is less about strutting out of a mall with the season’s latest must-have and more about holding up the receipt and pointing to the markdown. 

The consumer who once flaunted a Gucci bag now flexes that they scored a Fendi baguette cheaper — and secondhand — on The RealReal. The shopper who once paid full freight at Abercrombie now brags about stacking promo codes or boasts about nabbing the same label half-off at Burlington. The splurge has morphed into a scavenger hunt, and retailers are being forced to adjust.

This week’s earnings parade made the shift hard to ignore. 

Abercrombie, Kohl’s, and Foot Locker reported on Wednesday; Best Buy, Burlington, Dollar General, Dick’s, and Gap followed on Thursday. Each told the same story in different accents. Off-price chains are thriving. Dollar stores are luring even six-figure households. Mid-tier stalwarts are surviving only by dangling coupons or carving out “affordable luxuries” in their aisles. And the supposed big-ticket splurges — electronics, sneakers, apparel — are moving, for the most part, when they’re wrapped in discounts.

Consumers aren’t broke — they’re bargain-hunting. U.S. retail spending is still expanding; the National Retail Federation pegs 2025 growth at about 3%, nearly in line with pre-pandemic averages. Morgan Stanley expects consumer outlays to cool from almost 6% last year to closer to 4% this year, thanks to tariffs, debt loads, and a softer labor market. Translation: People are still shopping, but they’re shopping defensively.

And defense looks a lot like offense for discounters. McKinsey finds that nearly half of U.S. consumers now wait for sales before buying clothes or shoes, and nearly two-thirds say tariff uncertainty has already changed how they shop. What once looked like penny-pinching has turned into the new consumer sport: the promo-code Olympics.

The receipts back it up. Burlington’s revenue rose 10% and adjusted EPS jumped 42%, giving management the confidence to raise guidance for the second quarter in a row. Dollar General’s net sales rose more than 5%, EPS climbed 8%, and executives bumped their full-year outlook higher, noting that more affluent shoppers are now showing up for cheaper detergent and pantry staples. According to Placer.ai, Gap’s Old Navy quietly grew traffic about 5% on the back of jeans and basics pitched as affordable essentials.

The punchline is that those beats weren’t about carefree splurging; they were engineered with value — sharper mixes, private label, and promo timing that made shoppers feel like they’d won the price war. Earnings strength is coming from companies that are making the deal the draw. When retailers can show exactly how they’ll package value — and protect margins while they do it — investors listen.

Together, the numbers and the playbooks paint a consumer portrait that’s less about retreat than recalibration. Spending is steady, but shoppers want to feel clever about it. They’re not cutting back; they’re cutting deals.

The rise of bargain culture

The surge in off-price traffic isn’t an accident; it’s a macro barometer. Data from Placer.ai said that Burlington visits were up 8%, Five Below up 18%, and Ollie’s up 14% in the second quarter. Same-store visits — a cleaner measure that strips out store openings — rose almost 10% for some chains. In parking lots, that means cars spilling out of discount centers while department-store asphalt sits half empty. 

That foot traffic translated into earnings beats. Burlington raised its guidance after reporting double-digit revenue growth and a 42% profit spike. Dollar General told investors that not only are core households shopping more, but higher-income families are migrating down market — a trade-down that no longer carries stigma. Old Navy quietly notched positive traffic and sales as its racks of jeans and T-shirts offered value at a time when consumers are scrutinizing every dollar.

The flip side is equally sharp. Kohl’s sales fell 5% in the quarter, its comps slipped 4.2%, and Placer.ai data confirmed that store visits were down nearly as much. Executives lifted EPS guidance anyway — from as low as 10 cents per share to as high as 80 cents — after convincing Wall Street they could lean on two crutches: beauty and bargains. Sephora shop-ins brought traffic through the doors, while coupons at the register and impulse aisles at checkout kept carts from looking empty. It’s less a turnaround plan than a tacit admission that full-price apparel is becoming more of a dead weight. The stock surged nearly 20% midweek, a sign that investors are willing to reward tactical execution even in a softening middle market.

Best Buy offered another variation on the deal-as-door-opener theme. For the first time in three years, comps inched positive, helped by demand for AI-ready laptops and smartphones. But traffic was still down 1%, and the company warned that tariffs could offset any momentum. Consumers still want the gadget, but mostly if it’s on sale. Foot Locker, meanwhile, remains in a funk. Global revenue declined 2.4%, and the company booked a net loss. Even in North America, where comps eked out a gain, the broader message was that sneakers are no longer bulletproof.

Dick’s Sporting Goods was supposed to be a bright spot, posting 5% comp growth and raising guidance. But the detail that traffic was down more than 5% cut through the cheer, and the muted stock reaction underscored investor caution. The retailer made more money, but it did so by squeezing more from fewer shoppers — bigger baskets, pricier gear. Several analysts framed the caution around sustainability — strong tickets won’t outrun soft trips — and around execution risk more broadly. Even good prints are getting graded on the “How durable is your value story?” curve. 

Taken together, the week’s results show how bargain culture is reshaping behavior across income brackets. Consumers aren’t absent; they’re disciplined. They’ll fill carts at Burlington or Ollie’s and they’ll still buy the laptop or the sneakers, but they largely expect the retailer to meet them halfway. 

The deal has become the product.

Luxury learns about gravity

At the top of the market, the same psychology plays out in sharper relief. Hermès is still Hermès — quarterly sales up 9% even after the brand tacked on a 7% global price increase and an extra 5% hike in the U.S. to offset tariffs. Scarcity sells; exclusivity is impervious to sticker shock.

But Hermès might just be the exception. 

LVMH’s sales fell 4% in the first half, with its vaunted fashion and leather goods unit tumbling 9% in the second quarter. Gucci cratered nearly 25%. Bain & Company and McKinsey now forecast that the personal luxury goods market could shrink by up to 5% this year — a rare contraction for an industry that has spent the last decade training consumers to accept serial price hikes. Price elasticity has finally hit high fashion, in a world where nothing else is stretchy.

The “aspirational” shopper — the professional willing to stretch for a Vuitton tote or a Gucci belt — is pulling back. The message is similar to what Kohl’s or Best Buy reported: Consumers will still spend, but not at any price. Unless the product is genuinely scarce or differentiated, they expect a markdown, a perk, a sweetener. In luxury, that means brands leaning on outlets and subtle discounting; in mid-tier retail, it means coupons and “shop-in-shops.” Different markets, same consumer instinct.

Abercrombie is a perfect example of what has largely become the new middle. The company raised guidance on the strength of Hollister’s back-to-school season, but it also warned that tariffs could carve $90 million out of its profit. To offset that cost, the company leaned on promotions that resonated with teens and parents trained to expect a deal. Old Navy is finding the same traction with basics. In both cases, the formula is clear: deliver value… or get ignored.

Macro conditions only reinforce the shift. Tariffs loom, inflation lingers, and consumers have become savvier about timing purchases around promotions. Retailers can no longer count on habit or aspiration; they have to sell savings as much as they sell shirts or shoes. The receipt itself has become part of the pitch. And in the market, the grading rubric has changed. Companies that can spell out how they’ll defend value without nuking margins are getting the multiple; everyone else is getting a lecture.

The larger picture is that American consumers are not retreating; they’re negotiating. They’ll still buy the sneakers, the hoodie, the laptop, even the luxury bag — but they want the story of savings attached. In some cases, that story is literal: Burlington’s traffic surging double digits, Dollar General reporting bigger baskets from new demographics, Old Navy pulling shoppers back with promotions. In other cases, it’s psychological — see: Hermès convincing its clientele that higher prices are proof of exclusivity, not inflation.

The macro economy rests on consumer spending, and by that measure, the floor is solid. But the texture has changed. Deals, discounts, and promotions aren’t perks anymore; they’re requirements. Retailers that embrace that are raising guidance. Those that resist are watching traffic bleed.

In the end, the shift is cultural as much as financial. The dopamine hit isn’t walking out with a full-price splurge — it’s pointing to the receipt that proves you beat the system. The brag is no longer, “I bought it.” The brag is, “Look how much I didn’t pay.”