Why Americans Are Buying Less Groceries
American grocery purchases have declined approximately 2% year-over-year since February 2026, driven by elevated prices, SNAP benefit changes, and GLP-1 adoption. Consumers are shifting toward value retailers and discount stores, while major grocers face margin pressure despite attempts to maintain low prices.
Summary
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.
Key Insights
- A typical grocery stock-up trip that cost $300 in 2019 now costs $400, creating enough absolute dollar change to trigger sticker shock and prompt even upper-income consumers to change shopping behavior.
- Among consumers actively trying to reduce grocery spending, more than half are trading down to lower-price brands and private label products, while more than 40% are leaning on coupons and discounts.
- Successful grocers win by being sharply priced on high-visibility products like ground beef, chicken, milk, and eggs, combined with promotions, loyalty programs, personalization, and private label to create an understandable and trustworthy value proposition.
- New SNAP benefit restrictions in 2026 across dozens of states prohibit participants from buying sugary drinks and food, which is reducing grocery baskets beyond the effects of price sensitivity.
- PepsiCo reported that North America food revenue fell 2% while volume was flat, with executives noting that US food and beverage performance moderated and trailed expectations, requiring increased promotional spending.
Topics
Transcript
[0:00] Americans are buying less groceries. Grocery product purchases were flat in 2025, then declined about 2% year-over-year in most months since February of 2026. That's according to a report by NielsenIQ and Bain & Company that was shared exclusively with CNBC. This is surprising because rarely does the grocery market see full decline across the entire sector. Consumers are facing higher grocery prices and SNAP benefit changes, as well as other inflationary pressures, which is impacting the grocery industry. Years of [0:31] elevated grocery prices are forcing retailers like Walmart and Kroger to spend more keeping prices low even as shoppers buy fewer items. Now, that combination is making it harder to turn a greater profit. >> So, that…
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