Lower- and middle-income lead the way in beauty spending

Summary

• In the third quarter of 2026, lower- and middle-income households led beauty spending growth with increases of approximately 7% year-over-year.
• Higher-income households saw beauty spending rise by 5% year-over-year in the third quarter of 2026, a reversal from the trend observed in the second quarter of 2026.
• Retail spending excluding gas rose 3.5% year-over-year in September 2026.
• Almost 86% of discretionary retail categories experienced spending increases in September 2026.
• Spending increased across various sectors including jewelry, clothing, arts & crafts stores, & local coffee shops.
• Bank of America Institute data utilized in the analysis represents a significant number of data points but includes selection bias regarding income levels & geographies.
• The data is limited to debit & credit cards & excludes other payment methods such as cash or checks.
• Spending data is classified by Merchant Categorization Code (MCC) & mapped to the North American Industry Classification System (NAICS).
• The report includes spending from active US households only & excludes spending from corporate cards.
• Year-over-year growth rates are calculated by matching calendar days & based on a 7-day moving average of spending levels.
• Household income terciles are determined by quantitative estimates & periodically re-assessed to reflect factors like wage inflation & social security payments.
• The lowest tercile represents lower income, the middle tercile represents middle income, & the highest tercile represents higher income.