U.S. Consumers Say They're Bearing the Cost of Tariffs, Paying Above-Acceptable Prices and Trading Down to Cope, According to L.E.K. Consulting Survey

Consumer Brands' Only Avenue to Defending Margins is Novel Pricing Strategies

BOSTON, Oct. 7, 2025 /PRNewswire/ -- Americans believe they're shouldering the financial burden of tariffs in the form of prices they feel are unacceptable and say they plan to trade down to cheaper items or cut back in response. In addition, the vast majority foresee no improvement in their finances and expendable income coming soon.

More specifically, a survey of approximately 2,000 U.S. adults by L.E.K. Consulting, the strategy consultancy, found that:

• 68% of consumers believe they themselves are paying for tariffs
• Consumers believe they're already paying more than what they think is acceptable:
  • 61% feel that way about major household goods
  • 57% about apparel, footwear and accessories
  • 57% about autos and vehicle products
  • 50% about beauty products
  • 48% about pet food and supplies
  • 46% about groceries
• Only about a quarter expect their financial situation and discretionary spending ability to improve over the next 12 months (26%)

In response to higher prices all around, 74% of Americans anticipate reducing spending on apparel, shoes and accessories; 68% on major household goods; 63% on beauty products; 50% on cars and related products, and 46% on personal care products, according to the survey.

Significant percentages also report they'll spend less on groceries (37%) and pet food and pet supplies (27%).

"Interestingly, consumers plan to navigate high prices and to cut spending by trading down to lower priced brands in a number of categories, instead of just curtailing purchases – a phenomenon that consumer companies should be monitoring closely," said Laura Brookhiser, Managing Director at L.E.K. Consulting and coauthor of a related L.E.K. article.

For instance, 83% of consumers reported that they'll buy lower-priced durable household brands or products; 60% said they'll buy lower-priced clothing, footwear and accessory brands or products; 83% anticipate buying lower-priced auto and auto-related brands and products; and 71% say they'll buy lower-priced personal care brands and products.

How will companies respond to consumers' plight and rising prices?

"The most effective brands and retailers will seek to set prices to reflect the benefits that consumers actually feel – rather than simply adding a cost mark-up or matching the market, which has been customary at some companies. They will work hard to thoroughly understand the essential qualities that define the value proposition of the brand so they can ensure the price is right," said article coauthor Rob Haslehurst, Managing Director at L.E.K. Consulting.

"This approach will enable the company to maintain its margins in places where genuine differentiation exists, for instance, sustainability credentials or limited-edition collaborations. It also will help the brands signal fairness to the customer and enable them to flex prices by channel or consumer cohort," Brookhiser said.

"Notably, the survey pointed to the apparel category as the most sensitive for consumers when it comes to price increases from tariffs. In fact, we're seeing many apparel brands actually increase promotional activity to ensure that they can still sell through this year's styles," she added.

Methodology

L.E.K. Consulting conducted a pulse survey of a nationally representative, demographically balanced sample of approximately 2,000 U.S. adults during summer 2025 to assess evolving consumer perspectives on tariffs since April. Findings can be found here: Tariffs at the Checkout: How U.S. Consumers Are Reacting to Price Pressure.

About L.E.K. Consulting

We're L.E.K. Consulting, a global strategy consultancy working with business leaders to seize competitive advantage and amplify growth. Our insights are catalysts that reshape the trajectory of our clients' business, uncovering opportunities and empowering them to master their moments of truth. Since 1983, our worldwide practice—spanning the Americas, Europe, Middle East and Asia-Pacific—has guided leaders across all industries, from global corporations to emerging entrepreneurial businesses and private equity investors. Looking for more? Visit www.lek.com.

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SOURCE L.E.K. Consulting