If you've been following the economic narrative around American consumers this year, you've heard the term "K-shaped economy" enough times that it's started to lose its edge. This week, it got it back.

In the span of 48 hours, Goldman Sachs, NielsenIQ, the Federal Reserve Bank of New York, and the Food Institute all released research pointing to the same conclusion: the divide between high-income and low-income consumers isn't just persisting — it's accelerating, and for the first time, even affluent shoppers are starting to flinch.

The Goldman Warning

Goldman Sachs' chief U.S. economist David Mericle told Fortune on Thursday that while speculation about a K-shaped economy has been "somewhat exaggerated" in prior quarters, 2026 is when it will "really bite." The bank now expects underperformance from the bottom income quintile, driven by tepid job growth, cuts to Medicaid and SNAP benefits under the One Big Beautiful Bill Act, and disproportionate exposure to gasoline price increases from the Iran-Hormuz conflict.

Higher gasoline prices, Goldman noted, "disproportionately weigh on the spending of households in the lowest income quintile" — a group that was already stretched thin before diesel cleared $5 a gallon.

NielsenIQ Says It's No Longer a Hypothesis

NielsenIQ's latest analysis, "Decoding America's Great Consumer Split," goes further. The research firm identifies two distinct consumer archetypes — "Thrivers" and "Strugglers" — and finds that the divide has widened across financial, behavioral, and channel dimensions simultaneously.

Thrivers are leaning into investments, education, and out-of-home experiences. Strugglers are cutting back on everything, including non-discretionary categories like fuel and groceries. In nearly every product category, Strugglers plan to spend "less" at rates far exceeding their higher-earning counterparts.

The channel story is equally revealing: every income group is shifting spending online, but high-income households are moving so fast that online has become "one of the largest engines of total retail growth," per NIQ. Low-income households are still shopping in-store — but making more trips with smaller baskets, a classic fragmentation signal.

The Fed Is Paying Attention

The Federal Reserve Bank of New York announced Wednesday that it will release a two-part Liberty Street Economics series on May 1 examining "diverging consumer spending trends by income level." The Minneapolis Fed has already published supporting data showing that college graduates continue to outspend nongraduates at a widening clip — consistent with the K-shaped story.

Meanwhile, Bank of America Institute data shows higher-income households posted 2.9% year-over-year spending growth, compared to just 1.1% for lower-income households. Wage growth tells the same story: 4.2% for top earners, 0.6% for the bottom.

Even the Top Is Starting to Crack

Perhaps the most striking finding comes from the Food Institute, which reported this week that even high-income shoppers are trading down — switching to private label, scrutinizing price-per-unit, and comparing prices across retailers in ways they hadn't before. The K-shaped economy, the Institute argued, may be developing an "L shape" as white-collar layoffs mount and the cost of goods from groceries to home renovations climbs across the board.

Fortune went so far as to rebrand the phenomenon the "E-shaped economy" — with the middle class now diverging downward alongside lower-income households, leaving only the very top intact.

What It Means for Retail

For retailers, the implications are both strategic and immediate. The National Retail Federation still forecasts 4.4% retail growth in 2026 to $5.6 trillion — above the pre-pandemic 10-year average. But that topline number is increasingly misleading. Growth is concentrating in channels and categories that serve the top 20% of spenders, who now account for over 60% of total spending.

Brands and retailers operating with a single consumer archetype are flying blind. The winners in this environment will be the ones building bifurcated strategies: premium experiences for Thrivers, aggressive value plays for Strugglers, and a recognition that the middle is hollowing out faster than most playbooks account for.

As Goldman put it: "What originally appeared to be a solid year for consumer spending has quickly become more challenging." The K is getting sharper. And for the first time, both arms are pointing in directions that should worry everyone in retail.