America’s shoppers are moving to opposite ends of the spend curve. Corporate earnings show a widening split, with higher-income consumers still spending on travel and premium goods while middle-income households pull back. It points to a K-shaped consumer, where resilience at the top meets restraint below.

Split endings: Premium consumers are still spending through the noise. American ExpressAXP

reported 9% growth in card spending, its strongest in three years, driven by higher-income customers, CEO Stephen Squeri called “the cream of the crop.” Meanwhile, PepsiCoPEP

cut prices on brands like Lay’s and Doritos by up to 15% just to stabilize volumes. The rebound only came after those discounts, underscoring pressure on mid-tier demand as shoppers trade down.

• Amex saw luxury spending jump 18% in Q1, with restaurant spending up 9% and airline spend rising 8% before travel disruptions from the conflict.
• PepsiCo price cuts prompted retailers to reward the company with expanded shelf space, helping drive 2% volume growth after more than two years of declines.

The Steady Middle Ground

Caught between the two ends of the market, household staples producers like Procter & GamblePG

occupy the safer terrain between these extremes. The company posted its first volume increase in a year, up 2% overall, with its beauty division leading at 5%. CFO Andre Schulten acknowledged the “bifurcation of the consumer” and said pricing will stay focused on premium products while protecting volumes in more price-sensitive categories where private labels are gaining ground.

• P&G saw beauty volumes rise 5% on strength in personal care, skin, and hair, while grooming and health care declined 2%.
• Consumer sentiment has hit record lows even as spending holds, with economists warning the gap may close as refunds fade and inflation spreads beyond fuel.

Blurred lines: Consumer sentiment is already at record lows, and there’s little sign of price relief. According to The NYT, companies could collect over $166B in refunds from struck-down tariffs, much of which had already been passed on to consumers through higher prices. There’s little sign of those gains being returned, with only CostcoCOST

committing to sharing savings. For middle-income households already dealing with higher fuel and food costs, the squeeze doesn’t seem to be easing anytime soon.