U.S. grocery unit sales fall 1.8% as shoppers cut back on food

American shoppers bought fewer groceries in June than a year earlier, the latest sign that consumers are pushing back against years of food inflation.

U.S. grocery unit sales fell 1.8% in June from a year earlier, Bain & Company data show, as shoppers bought fewer items despite ongoing food inflation, intensifying pressure on food companies already grappling with shifting consumer habits.

"The consumer is clearly becoming more price-sensitive, and that's showing up in the basket size," said Steve Caine, a partner at Bain & Company's retail practice. "Food companies can no longer rely on price increases to drive revenue growth."

The decline in unit sales outpaced the 0.5% drop in national brand volumes recorded by Circana for the first half of 2026 through June 14, underscoring a broader pullback. Store brands, meanwhile, gained ground, reaching a record 23.8% unit market share, according to the Private Label Manufacturers Association. Private label unit sales rose 0.2% over the same period, while national brands fell 0.5% — a spread of 0.7 percentage points. Pet Care led store brand growth at 4.8%, followed by Beverages at 1.8% and Refrigerated at 1.5%.

The pullback threatens revenue and margins at major food companies including Kraft Heinz, General Mills, and Conagra, which had leaned on price increases to offset higher ingredient, labor, and transportation costs over the past two years. With unit volumes declining, those companies may need to increase promotional spending or cut prices to win back shoppers, squeezing profitability in a sector already facing investor scrutiny over pricing power.

The grocery slowdown marks a shift from the post-pandemic pattern where consumers absorbed repeated price increases. A Zappi survey found that the share of consumers who say they only buy national brands dropped to 10% from 21% in less than a year, and more than 90% changed their shopping behavior because of rising costs. Nearly 70% of consumers said they would accept fewer product options in exchange for lower prices, according to the survey.

"The era of growth driven by price increases is coming to an end," said Natali Kelly, Zappi's chief marketing officer. "For CPG leaders to transform their businesses, they will need to compete on value instead of price, innovating and simplifying their product portfolios in the process."

Wholesale Prices Add to the Picture

The consumer pullback comes as wholesale prices unexpectedly declined 0.3% in June, driven by a sharp drop in gasoline costs, according to separate data released this week. That could provide some relief to food companies' input costs, though ingredient and supply chain expenses remain elevated relative to pre-pandemic levels. The disconnect between easing wholesale inflation and persistent retail food prices has drawn scrutiny from policymakers and consumer advocates.

The last time grocery unit sales contracted at a comparable pace was in late 2023, when consumers similarly pushed back after two years of double-digit food inflation. That episode prompted several packaged food companies to ramp up couponing and trade spending, compressing margins by 100 to 200 basis points across the sector, according to industry estimates.

For food companies, the immediate challenge is navigating a consumer that is both more value-conscious and more willing to switch to private label. Store brands have now gained unit market share for six consecutive quarters, Circana data show, and the trend shows no sign of reversing. Bain's Caine said the second half of 2026 will be a critical test: if unit sales continue to decline, companies may be forced into more aggressive price cuts ahead of the holiday season, typically the highest-volume period for grocery sales.

This article is for informational purposes only and does not constitute investment advice.