In times of economic uncertainty, one common indicator of consumer behavior is the increase in spending at budget-friendly retailers nationwide. As individuals and families navigate financial challenges, they often turn to accessible and affordable options, contributing to a surge in shopping at stores like Walmart. While this trend reflects the broader economic landscape, it also raises concerns about its impact on employee distress and financial wellbeing across various industries and regions.
Understanding the Shift in Consumer Behavior
Recent data from the U.S. Bureau of Economic Analysis reveals a significant increase in consumer spending at discount retailers during periods of recession. In fact, sales at budget-friendly stores like Walmart have seen a 20% uptick compared to previous years, highlighting the shift in consumer preferences towards value-driven shopping.
The concept of the “lipstick effect” also comes into play, which refers to the phenomenon where individuals tend to spend on small indulgences like premium lipstick during periods of economic downturn or recession. This behavior is driven by a psychological need for accessible pleasures even in times of financial constraint.
In the context of employee financial wellness, understanding consumer behavior during economic distress, such as the lipstick effect, can provide insight into the psychological and economic factors influencing spending habits. Employers can leverage this knowledge to implement financial wellness programs that address the emotional aspects of financial stress and help employees manage their finances effectively. By recognizing the impact of external economic factors on individual spending behaviors, employers can tailor financial wellness initiatives to support employees during challenging times and promote overall wellbeing.
Implications for Employee Wellbeing
As Forbes reports, “financial strain doesn’t just affect employees at home; it follows them into the workplace, impacting their mental health, productivity and overall job performance.” By combining financial wellbeing tools with comprehensive support initiatives, employers can create a holistic framework for enhancing employee resilience and wellbeing during times of economic uncertainty. Prioritizing mental health resources, providing practical tools like 401k planning or budget builders, and fostering a culture of open communication can further strengthen employee engagement and satisfaction.
Bottom line on top: proactively helping employees achieve financial stability, literacy, and overall wellbeing contributes to loyalty and productivity.
Promoting Employee Resilience and Support
Three out of four employees across different sectors express concerns about job security and financial strains during economic downturns, according to a recent survey by the National Workforce Institute. Employers have an outsized role in providing support and intervention when it comes to financial wellbeing, especially during turbulent times. Total rewards packages provide a direct and immediate impact, but layering on resilience training, financial planning, long-term savings, and investment support build a stronger foundation for the future.
Financial health programs are nearly ubiquitous among employer strategies, according to Business Group on Health’s 2025 Employer Well-being Strategy Survey. “Ninety-two percent of employers include financial health as a dimension of wellbeing strategy in 2025, with 100% of employers projected to include it for 2026. Some employers already support financial wellbeing through subsidies or financial contributions, to help with life events such as student loan repayment, tuition reimbursement and emergency savings.”
Financial Wellness Tools and Support
To address employee distress and financial wellness, employers can leverage a range of financial tools and support mechanisms. Implementing financial wellness programs, offering access to financial planning resources, and providing educational opportunities on budgeting and savings can empower employees to navigate economic challenges with confidence.
At Personify Health, we empower employees to make informed decisions and motivate them to take action with easy access to the tools and support available to them. This may include personalized journeys and goal setting; financial education and planning; stress management and coaching; and more.
Enrich, Personify Health’s financial wellness partner, also offers practical tools and expert advice. For example, it recommends lifestyle changes during an economic downtown: “If expenses are too high for income, or if there is a job loss or change, adjusting your lifestyle may become necessary quickly. That may look like downsizing a home or eliminating extras like travel and hobbies for a period. These changes can be jarring at any point, but they can feel even worse when they’re forced upon us and require immediate attention.
To prepare for potential lifestyle adjustments, consider what can be done now. For instance, if housing costs are eating up a majority of your total earnings, evaluating alternatives may be worth it. Similarly, if your vehicle is the latest and greatest but costs an arm and leg each month, transitioning to a lower-cost model may be the best choice.”
Conclusion
The intersection of consumer spending trends, employee distress, and business performance highlights the importance of supporting individual financial health. By providing access to financial wellbeing tools, resources, and comprehensive support programs, employers can empower their workforce to navigate economic challenges with resilience and confidence.
At Personify Health, we are dedicated to advocating for employee wellbeing and financial empowerment nationwide. Together, let us collaborate in building a culture of care, support, and resilience to ensure a brighter future for employees across the country, today and in the years to come.
Bonus content: check out MeQ’s State of the Workforce report on change readiness and psychosocial risk and Enrich’s free financial mediations.
