U.S. grocery spending slows in hit to food companies

Key Points:

• U.S. grocery sales are declining as shoppers buy fewer items despite rising prices, with grocery units falling 1.8% in June compared to the previous year, according to Bain & Company's analysis of NielsenIQ data.
• Grocery prices are about 33% higher than in 2019, and combined with higher fuel costs and reduced SNAP benefits, many consumers, especially lower-income households, are cutting back on spending.
• Bain's survey found 80% of Americans are trying to spend less, with 28% actively reducing grocery purchases, often trading down to cheaper brands, buying fewer items, and using more coupons and promotions.
• Food manufacturers like PepsiCo report weakened demand in North America, with increased promotional activity as consumers become more price sensitive amid economic pressures such as high gas prices.
• Retailers including Walmart and Kroger are responding by emphasizing price cuts and value-focused promotions, with experts noting that grocers who offer sharp pricing on key products and combine promotions, loyalty programs, and private labels are better positioned to attract budget-conscious shoppers.