Why Americans Are Buying Less Groceries

According to a NielsenIQ and Bain & Company report shared with CNBC, grocery product purchases were flat in 2025 and have declined about 2% year-over-year in most months since February 2026, marking a rare full-sector decline. This contraction is driven by multiple factors: persistent high grocery prices, changes to SNAP benefits across dozens of states in 2026 that restrict sugary drinks and foods, other inflationary pressures, and increasing adoption of GLP-1 medications that reduce overall food consumption.

The pricing environment has created significant sticker shock for consumers. A grocery stock-up trip that cost $300 in 2019 now costs $400, prompting even upper-income consumers to shop around more deliberately. In response, 28% of consumers report actively trying to reduce grocery spending, with over half trading down to lower-priced and private label brands, and more than 40% relying on coupons and discounts.

Retailers face a difficult margin squeeze. Major chains like Walmart and Kroger must spend more on price reductions to attract shoppers while customers purchase fewer items overall, making it harder to maintain profitability. Success in this environment requires retailers to be sharply priced on high-visibility products like ground beef, chicken, milk, and eggs, while strategically using promotions, loyalty programs, personalization, and private label offerings to build customer trust.

The shift is reshaping market winners, with value players, discount stores, and club stores gaining shoppers at the expense of traditional grocers. Even major food and beverage companies like PepsiCo are experiencing impact, with North America food revenue declining 2% in recent quarters. Analysts suggest that industry growth may not return to normal without broader economic relief through lower gas prices and reduced inflation.