U.S. grocery slowdown deepens as shoppers buy fewer items, raising pressure on food companies

The U.S. grocery slowdown is becoming harder to ignore.
Shoppers are buying fewer items than a year ago, and grocery sales are declining as weakening unit sales are now outweighing rising prices. That is according to new analysis from Bain & Company using NielsenIQ grocery data shared exclusively with CNBC.
Grocery units, which refer to individual items or products sold, fell 1.8% in June from a year earlier, a sharp reversal from the 0.1% year-over-year growth recorded in June 2025. While prices continue to rise about 2% to 3% year-over-year, that inflation cushion for the industry is no longer enough to keep overall sales growing.
"That big grocery stock up trip that costs you $300 in 2019, now costing you $400," said Kurt Grichel, head of Bain's Americas retail practice.
"Even that upper-income consumer, you're talking a big enough absolute dollar change that people start to feel a little bit of that sticker shock and start to shop around," said Grichel.
Rather than one economic shock, Bain suggests several pressures have converged on consumers.
Grocery prices are roughly 33% higher than they were in 2019 and fuel costs have spiked. Many lower-income households have also had to cut back spending due to reduced SNAP benefits and tighter program eligibility.
Bain's U.S. Consumer Pulse Wave survey conducted in May found 80% of Americans are still trying to spend less, while 28% are actively cutting back on grocery spending. Among those shoppers, 56% said they are trading down to cheaper brands, 49% said they are buying fewer items and 44% said they are relying more heavily on coupons and promotions.
Those trends are having ripple effects for producers. PepsiCo is one of the food manufacturers feeling the consumer shift.
During its second quarter reported on Thursday, the beverage and snack maker said North American demand weakened. North America food revenue fell 2%, while volume was flat.
"I think the consumer is worse than what we had anticipated, and it's driven mainly by gas prices," said PepsiCo CEO Ramon Laguarta during the company's conference call with investors.
Executives also pointed to lower effective pricing, indicating the company increased promotional activity as consumers became more price sensitive.
Those results align with a broader shift across the grocery industry, where retailers including Walmart and Kroger have emphasized price cuts and value-focused promotions to attract shoppers.
Walmart announced summer price cuts to beef, ice cream and other items including products made by PepsiCo, Coca-Cola and the company's own private label Great Value.
"The grocers have been pushing back on the suppliers to reduce prices where possible, and the suppliers recognize the need to do so," said Telsey Advisory Group analyst Joe Feldman.
"The entire industry is trying to get back to unit growth, not just dollar growth."
Bain said that strategy may become increasingly important.
"The edge goes to grocers that are priced sharply on the products that customers notice," said Grichel. "Most things like ground beef, chicken, milk, eggs, and they're using a combination of promotions, loyalty programs, personalization, private label to stitch together an overall value proposition that customers can understand and trust."

Facts Only

Grocery units fell 1.8% in June compared to the same month a year prior. Grocery sales are declining as weakening unit sales now outweigh rising prices. Prices have increased by approximately 2% to 3% year-over-year. PepsiCo reported that North American food revenue fell 2% while volume was flat in the second quarter. Eighty percent of Americans are trying to spend less, and twenty-eight percent are actively cutting back on grocery spending. Fifty-six percent of surveyed shoppers traded down to cheaper brands, forty-nine percent bought fewer items, and forty-four percent relied more heavily on coupons and promotions. Walmart announced summer price cuts on beef, ice cream, and other items including those from PepsiCo and its private label Great Value.

Executive Summary

Shopper behavior in the grocery sector is slowing down as declining unit sales are now overshadowing rising prices. In June, grocery units fell 1.8% year-over-year, contrasting with the 0.1% growth recorded in June 2025. Inflation remains present, with prices increasing by about 2% to 3% year-over-year. This economic pressure is compounded by rising fuel costs and reduced income for some households due to changes in SNAP benefits and eligibility. Consumer surveys indicate that a significant portion of Americans are attempting to spend less, with specific behaviors including trading down to cheaper brands, buying fewer items, and relying more on promotions. Food manufacturers, such as PepsiCo, reported weakened North American demand and lower revenue volume during the second quarter. Retailers are responding by emphasizing price cuts and value-focused promotions, leading suppliers to reduce prices. The industry is currently focusing on achieving unit growth rather than just dollar growth through strategies involving promotions, loyalty programs, and private labels.

Full Take

The shift described reveals a tension between persistent inflationary pressures and real consumer purchasing power, suggesting that economic shocks are compounding existing structural shifts within the food system. The convergence of cost increases across different sectors—food prices, fuel costs, and household income constraints—creates a pressure point where consumers are forced to recalibrate spending habits. The movement from dollar growth to unit growth highlights a systemic prioritization shift: producers and retailers must move beyond simple price adjustments to focus on perceived value bundles. The strategy of stitching together value propositions through private labels, loyalty programs, and personalized promotions suggests that the future competitive edge lies not in cost leadership alone, but in managing customer perception and trust regarding value delivery. The narrative framing links macroeconomic forces (inflation, fuel) directly to micro-level choices (brand switching, item reduction), implying that consumer agency is constrained by these larger economic realities. This dynamic necessitates an examination of how industry structures—supply chains, branding, and retail strategies—adapt to redefine the relationship between cost, volume, and perceived quality in a climate of sustained financial strain.

Sentinel — Human

Confidence

This analysis appears to be a well-sourced journalistic synthesis that effectively connects economic data with corporate responses, showing typical patterns of expert-driven reporting.

Signals Detected

Sentence length variance is varied; the flow is slightly less mechanically uniform than typical LLM output.

The text successfully integrates disparate data points (Bain data, PepsiCo quotes, retailer actions) into a coherent narrative framework.

Citations of specific entities (Bain & Company, NielsenIQ, PepsiCo CEO) suggest reliance on traceable sources rather than generic assertions.

The narrative follows a logical path from macro trends to micro actions without overtly fabricated claims or overly polished quoting.

Human Indicators

The direct, somewhat conversational tone in the quotes (e.g., Kurt Grichel's comments) suggests human sourcing.

The integration of specific financial/industry jargon alongside consumer behavior is handled naturally.