The slowdown in U.S. food products is becoming impossible to ignore.
Grocery sales are down as shoppers buy fewer items than they did a year ago and weak unit sales outweigh rising prices. That’s according to a new Bain & Company analysis using Nielsen IQ grocery data shared exclusively with CNBC.
The grocery sector, which refers to individual items or products sold, fell 1.8% year-on-year in June, a sharp reversal from the 0.1% year-on-year increase recorded in June 2025. Although prices continue to rise by about 2% to 3% year-over-year, the industry’s inflation cushion is no longer sufficient to sustain overall sales growth.
“A big grocery trip that cost $300 in 2019 now costs $400,” said Kurt Grikel, head of Bain’s Americas retail practice.
“We’re talking about a big enough absolute dollar change that people, even high-income consumers, feel a little bit of that sticker shock and start shopping,” Grichel said.
People shop for groceries at a Wegmans store in Brooklyn, New York City, July 13, 2026.
Spencer Pratt | Getty Images
Bain suggests that rather than a single economic shock, several pressures are concentrated on consumers.
Food prices have increased by about 33% compared to 2019, and fuel costs are also rising. Many low-income households are also being forced to cut back on spending due to reduced SNAP benefits and stricter eligibility for the program.
Bain’s May U.S. Consumer Pulse Wave Survey found that 80% of Americans are still trying to cut back on spending, with 28% actively cutting back on grocery spending. Of these shoppers, 56% said they were switching to cheaper brands, 49% said they were buying fewer items, and 44% said they were relying more on coupons and promotions.
These trends are having a ripple effect on producers. pepsico is one of the food manufacturers sensing a shift in consumers.
During the second quarter reported Thursday, the beverage and snack maker said demand in North America weakened. North American food revenue decreased 2%, but sales volumes were flat.
“I think the consumer situation is worse than we anticipated, and that’s primarily driven by gas prices,” PepsiCo CEO Ramon Laguarta said on a conference call with investors.
Executives also pointed to lower effective prices, suggesting the company has stepped up its promotional efforts as consumers have become more price-sensitive.
These results are consistent with broader changes across the grocery industry. walmart and kroger has emphasized discounts and value-oriented promotions to attract shoppers.
Walmart announced summer price cuts on beef, ice cream and other products, including PepsiCo products. coca cola And the company’s own private brand “Great Value.”
“Grocery stores are asking suppliers to lower prices wherever possible, and suppliers are recognizing the need to do so,” said Joe Feldman, an analyst at Telsey Advisory Group.
“The whole industry is trying to get back to unit growth, not just dollar growth.”
Bain said strategy could become increasingly important.
“Grocery stores that charge significantly higher prices on items that customers are interested in have an advantage,” Grichel said. “Most products, such as ground meat, poultry, milk and eggs, combine promotions, loyalty programs, personalization and private labeling to piece together an overall value proposition that customers understand and trust.”
