Consumer Spending Shifts: U.S. Retailers Gain Ground as Discount Platforms Falter

Retail Landscape Transformation

In a landscape marked by evolving consumer behaviors, a recent report from Consumer Edge has unveiled a significant shift in U.S. retail spending. As geopolitical tensions rise between the U.S. and China, American shoppers are pulling back from popular discount platforms like Temu and SHEIN, redirecting their spending to brands such as Old Navy, Ulta Beauty, and Nordstrom Rack. This trend signals a changing tide in consumer preferences and brand loyalty.

Findings from Consumer Edge

Producer of market insights and consumer data, Consumer Edge's latest analysis reveals a stark decline in growth for Chinese discount retailers. In April 2025, Temu's growth plummeted from nearly 50% at the beginning of the month to virtually zero by its end. Meanwhile, SHEIN experienced a similar trend, as its year-over-year spending growth fell from approximately 30% to around 20%. These findings suggest that consumers are increasingly cautious about where they spend their money, responding to external pressures and shifting market dynamics.

Factors Behind the Shift

The decline in spending at these platforms can be attributed to several key factors:
1. Geopolitical Tensions: Ongoing U.S.-China trade tensions have made consumers wary of purchasing from Chinese retailers, as trade barriers and tariffs continue to evolve.
2. Regulatory Changes: The U.S. government’s elimination of duty-free treatment for low-value imports has further complicated the appeal of these discount platforms.
3. Advertising Cuts: Both Temu and SHEIN have apparently reduced their advertising expenditures, contributing to a decline in consumer interest and engagement.

Consumers are Going Back to Classics

Among the American brands gaining momentum, many legacy department stores are seeing a resurgence in popularity. Stores like Bloomingdale's, Kohl's, and Nordstrom Rack are attracting former Temu and SHEIN shoppers by offering vast selections across various categories. Customers are gravitating back to these trusted names as they seek reliability and quality in their purchases.

Old Navy: A Comforting Choice

Old Navy, known for its affordability and wide range of clothing options, is successfully courting value-conscious consumers shifting away from ultra-discount platforms. By appealing to families and all demographics with its assortment, Old Navy is reclaiming its market share with ease.

Resale Market Expansion

Additionally, there’s a noteworthy increase in interest in resale shops, especially Savers Value Village, which is thriving amidst the rising value-oriented mindset of consumers. Resale is quickly becoming a preferred choice for many, confirming that second-hand shopping is no longer merely an option but a fashionable trend.

Shift in Beauty Purchases

The beauty sector is also witnessing significant consumer shifts. Ulta Beauty and the brand SpoiledChild are rapidly gaining popularity as shoppers pivot towards better quality personal care products, favoring reputation and quality over prices alone. Consumers are making considered decisions, seeking personal care products that reflect their values and preferences.

Insights from Consumer Edge

Michael Gunther, Vice President of Insights at Consumer Edge, commented on these changes, stating, "The data isn't just showing a slight dip — we're witnessing a rapid reallocation of spending away from these Chinese platforms, allowing us to pinpoint specific brands that are gaining momentum among these consumers. The current political and economic environment is leading to significant shifts in U.S. consumer behavior, and we can track this movement through near-real-time data."

Conclusion

In summary, as U.S. consumers reevaluate their spending habits amidst changing political and economic scenarios, American retailers are poised to benefit significantly. With a combination of traditional values, adaptive strategies, and responsiveness to consumer preferences, brands like Old Navy and Ulta Beauty are expected to capitalize on this consumer spending shift, providing not just products, but also trust and community engagement as critical factors in their resurgence. The retail landscape is not just changing; it is evolving towards a more localized and value-oriented focus that meets the expectations of today’s consumers.