Chinese luxury and premium beauty demand is showing early signs of recovery, offering global brands a rare growth bright spot as affluent consumers return to spending and discounting eases.

Global inflation pressures are eroding consumer spending, shaping central bank policy, and creating uneven growth across major economies.

As retailers navigate tariffs, labor shortages, supply chain disruptions and geopolitical instability, they face a “tale of two retails” where affluent consumers keep spending and middle- and lower-income shoppers remain under pressure.

Higher energy and food costs pushed inflation to a three-year high, reinforcing expectations that the Fed will keep rates elevated.

FDRA’s Q1 2026 survey finds sales improving, outlooks at a 5-quarter high and consumer demand holding steady, even as tariffs and rising material costs loom.

Spending stayed strong into November, but hiring remained sluggish, easing pressure on the Fed to cut rates.