Consumer confidence drops as big retailers cut prices ahead of the holidays

September confidence fell sharply while major retailers moved more aggressively on price. The evidence points to a more value-conscious consumer, not yet to an across-the-board spending contraction.

Developing Updated September 30, 2026 · High confidence

What changed?

The Conference Board’s consumer-confidence index fell to 81.9 in September from 88.6 in August. At the same time, Target said it was reducing prices on nearly 2,000 items ahead of the holidays. August retail and food-service sales had still risen 1.2%, so weaker sentiment has not yet translated into a broad spending decline.

Why does it matter?

The combination points to customers who are still spending but are increasingly sensitive to price. Retailers face more promotional pressure going into the holiday season. Restaurants, beauty businesses and hotels should watch whether customers trade down, reduce frequency or become more responsive to offers instead of assuming that low confidence means demand has already broken.

Who is most exposed?

Mid-market retailers without much pricing room; discretionary restaurants and hospitality operators; beauty and personal-care businesses dependent on repeat visits; brands competing against large retailers able to fund price cuts.

What should businesses watch next?

Holiday-sales guidance, the next retail-sales data, restaurant traffic rather than nominal sales alone, and whether discounting spreads beyond large chains. If promotions broaden while unit demand softens, the current value shift would look more like a demand slowdown.

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