People are spending more of their time alone and online. Gen Zers don’t feel financially secure but are willing to splurge. In their search for value, shoppers are buying smaller pack sizes or lower quantities of their preferred brands. These are some of the trends highlighted in McKinsey’s ConsumerWise research on consumer sentiment and behavior, drawing on a survey of more than 25,000 consumers in 18 countries. Two ConsumerWise leaders discussed the findings on a recent webinar, excerpts of which are featured in this episode of the McKinsey on Consumer & Retail podcast, hosted by Monica Toriello. An edited transcript follows. (For ConsumerWise insights about the upcoming US holiday shopping season, read “ An update on US consumer sentiment: Settling in for a tepid holiday season ,” and the related podcast episode, “ Holiday shopping 2025: US consumers hunt for early deals .”) Monica Toriello: Hello, everyone. I’m Monica Toriello, an editorial director at McKinsey. We’re excited that you’ve joined us today to hear more about McKinsey’s report, titled State of the Consumer 2025: When disruption becomes permanent . As I’m sure many of you have observed, consumers are doing interesting things; they’re making what seem like paradoxical buying decisions. McKinsey’s ConsumerWise research unpacks some of the underlying motivations and drivers behind these decisions. Today, we have the pleasure of hearing from the two global leaders of our ConsumerWise capability: Christina Adams , a partner in our Dallas office, and Kari Alldredge , a partner based in Minneapolis. They are coauthors of the State of the Consumer report. Kari and Christina, before we dive into the consumer sentiment data, I’d like to ask a high-level question about consumer sentiment data in general. One thing you’ve observed in recent years is a decoupling of consumer sentiment and consumer spending . It used to be that the two were fairly in sync: When sentiment was positive, people spent money—and when they weren’t feeling so great, they didn’t spend as much money. But that has not been the case recently. So, given this divergence, why should companies still pay attention to consumer sentiment? What are the benefits of knowing how consumers are feeling, in an era when how they’re feeling about the economy or about their finances is increasingly divorced from how they’re spending? Kari Alldredge: It’s true that, at the highest level, consumer confidence—which has long been looked at to understand how consumers are feeling, and which had correlated quite closely with consumer spending—is less and less correlated, particularly in the United States and in Western Europe. That makes it only more important to understand consumer sentiment at a much more granular and detailed level. You can’t just depend on confidence. You need to dig deeper: look at it by demographic group, by psychographics, by generation. That’s one reason that we pull in a myriad of different data sources for this report. There’s spending data, foot traffic data, digital data on how consumers are spending their time online. We’re bringing a 360-degree view of the consumer, and that’s fueling much of what you’ll hear today. Christina Adams: Another thing we have observed is there are different drivers of why people say they are confident or are lacking confidence. Some of those drivers are macroeconomic; How today’s consumers are spending their time and money 2