As high inflation turns from a transient to a permanent part of life, American consumers are more cautious as to how much money they spend and where they spend it, substituting more expensive for less expensive products and services they typically buy. That's the key finding of a new survey by foot traffic analytics firm, titled Foot Traffic Data Reveals Consumers Are Trading Down.

"In periods of economic uncertainty, and especially in one driven by inflation and rising gas prices, some consumers are going to look to maximize their spending by 'trading down' to more value-oriented retailers," Ethan Chernofsky, VP of Marketing at, told International Business Times.

The "trading down" is broad, extending across all industries covered by the report, from dining (QSR, fast food, full-service restaurants), to grocery, superstores, discount and off-price, apparel, dollar stores, and shopping malls. And it touches almost every brand mentioned in the report from McDonald's, Chipotle, Target, H-E-B, Walmart Neighborhood Market, Dress for Less, Citi Trends, Five Below, and Dollar General.

An excellent example of this great "trading down" is replacing high-end full-service dining for fast food and QSR. For instance, the survey finds that in the week of June 6, when inflation was running at an annual rate of 8.6%, traffic at full-service restaurants decreased at an annual rate of 4%, while traffic at QSR and fast-food restaurants increased by 7.3%.

That's a significant change from Dec. 6, 2021, when inflation was running at an annual rate of 7% and spending on full-service restaurants was up over 50%. That means consumer spending on discretionary services, such as dining out, is slowing down and shifting towards low-end dining.

The change in dining consumer habits isn't confined to the U.S. It extends to Europe, where inflation is also rising at a multi-year high.

"We're seeing consumers changing their habits," Anthony Kelesis, member of the board of Athens, Greece-based Mantis group, a Fast-Moving Consumer Goods (FMCG) company, told IBT. "They pay more visits and spend more time socializing during the day in coffee shops and fast-food outlets and less time in the evening and night in full-service restaurants, bars, and nightclubs."

A similar pattern is evident in grocery and apparel retailing, where consumers ditch upper-scale stores for low-scale discount stores.

The gap between the upper-end and the low-end retailing could worsen as the Fed raises interest rates, the American economy slows down, and the unemployment rate rises, which usually hits the low-income households more than the higher-income households.

What does this great trading down mean for retailers? It's a big opportunity for low-end retailers to raise their market share in the industry. "While it could end up being a short-term phenomenon driven by the current economic headwinds, there is also the potential that this creates a longer-term impact," says Chernofsky. "If chains that benefit from this shift can drive impactful retail experiences, those customers who are trading down may choose to stick with those retailers even after the initial cause goes away."

And that could be an ample opportunity for investors in the shares of low-end retailers trading on Wall Street.