U.S. grocery slowdown deepens as shoppers buy fewer items, raising pressure on food companies

The U.S. grocery slowdown is becoming harder to ignore.

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.

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.

"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.

"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.

Rather than one economic shock, Bain suggests several pressures have converged on consumers.

Grocery prices are roughly 33% higher than they were in 2019 and fuel costs have spiked. Many lower-income households have also had to cut back spending due to reduced SNAP benefits and tighter program eligibility.

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.

Those trends are having ripple effects for producers. PepsiCo is one of the food manufacturers feeling the consumer shift.

During its second quarter reported on Thursday, the beverage and snack maker said North American demand weakened. North America food revenue fell 2%, while volume was flat.

"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.

Executives also pointed to lower effective pricing, indicating the company increased promotional activity as consumers became more price sensitive.

Those results align with a broader shift across the grocery industry, where retailers including Walmart and Kroger have emphasized price cuts and value-focused promotions to attract shoppers.

Walmart announced summer price cuts to beef, ice cream and other items including products made by PepsiCo, Coca-Cola and the company's own private label Great Value.

"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.

"The entire industry is trying to get back to unit growth, not just dollar growth."

Bain said that strategy may become increasingly important.

"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."