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The U.S. grocery slowdown is becoming harder to ignore. <\/p>\n
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.<\/p>\n
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. <\/p>\n
“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.<\/p>\n
“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.<\/p>\n
People shop for groceries at a Wegman’s store in Brooklyn on July 13, 2026 in New York City. <\/p>\n
Spencer Platt | Getty Images<\/p>\n
Rather than one economic shock, Bain suggests several pressures have converged on consumers.<\/p>\n
Grocery prices are roughly 33%<\/a> higher than they were in 2019 and fuel costs have spiked<\/a>. Many lower-income households have also had to cut back spending due to reduced SNAP benefits<\/a> and tighter program eligibility.<\/p>\n 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. <\/p>\n Those trends are having ripple effects for producers. PepsiCo<\/a> is one of the food manufacturers feeling the consumer shift. <\/p>\n During its second quarter reported<\/a> on Thursday, the beverage and snack maker said North American demand weakened. North America food revenue fell 2%, while volume was flat. <\/p>\n “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.<\/p>\n Executives also pointed to lower effective pricing, indicating the company increased promotional activity as consumers became more price sensitive.<\/p>\n Those results align with a broader shift across the grocery industry, where retailers including Walmart<\/a> and Kroger<\/a> have emphasized price cuts and value-focused promotions to attract shoppers. <\/p>\n Walmart announced summer price cuts<\/a> to beef, ice cream and other items including products made by PepsiCo, Coca-Cola<\/a> and the company’s own private label Great Value.<\/p>\n “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. <\/p>\n “The entire industry is trying to get back to unit growth, not just dollar growth.”<\/p>\n Bain said that strategy may become increasingly important. <\/p>\n “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.”<\/p>\n