One of the more difficult things in life is accepting that other people, especially our children, use money differently from what we did.
I too would be concerned if my GC were given everything they wanted, but if their parents are able to afford it, or willing to make sacrifices to give them things, then really they are only doing what we did too, just with some different things.
I remember when I was about 9 hearing a great-aunt express the thought that we were spoiled with a playroom full of dolls and shop-bought dolls' clothes. She had only had one doll and the clothes she made for her herself!
The one thing you can and are giving your grandchildren is time. I'm sure if you bake, sew, or go for walks with them, whatever suits you and them, they will look back on this later in life with joy.
Depending on your relationship with your DD, you may feel you can drop a hint as to whether or how children who are given everything learn the value of money, but it is probably better not to do so. If you are asked for advice that is a different matter altogether.
Right now it is important for them to have the same as their school friends. Probably, in a year or two your DD will introduce the concept of them saving up for things, or earning pocket money. Actually now would be a good time to start for the 12 year old IMO, but again unless you are asked for your opinion, it is probably wisest not to give it.