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Shoppers may be starting to feel some relief at grocery stores as food giants look to restart growth after years of price increases.
General Mills, maker of Cheerios and Nature Valley bars, said last month it had cut prices on nearly two-thirds of its North American grocery products to increase production. PepsiCo also plans to lower prices on some foods this year to improve affordability.
Consumer inflation concerns are a huge burden Product volume in the most recent quarter. PepsiCo said in October that snack sales in North America fell 4%, while beverage sales fell 3%. Other food manufacturers such as Conagra Brands, Kraft Heinz and JM Smucker recorded declines in sales.
“Consumers make up two-thirds of the economy,” said Brian Choi, managing partner and CEO of The Food Institute. “They were bugged.”
The price of home-cooked meals is expected to rise by 2.3% in 2026, a slight improvement over last year. According to data from the USDA Economic Research Service. Despite this increase, food price inflation has soared, marking a sharp decline due to the COVID-19 pandemic. 40-year high.
Most of the recent price increases have come from raw materials such as coffee and ground beef, which rose 18.8% and 14.9% respectively over the past year. According to Ministry of Labor statistics. Candy and gum prices soared 10.1%, and necessities Bananas, lettuce, cereals, etc. are all more expensive too.
General Mills noted that higher prices have led more shoppers to buy discounted food, especially among those making less than $100,000.
PepsiCo, which is seeking to cut prices as part of its turnaround plan, has “an opportunity to reinvest in value in a more tangible way,” said Ramon Laguarta, the beverage and snack company’s CEO. said in December.
“There has been a huge reset in affordability because we see consumers struggling in the United States and many Western countries.” he told the Wall Street Journal in an interview.
Despite some cuts, there are still categories where food manufacturers are raising prices to offset inflationary pressures. Confectionery maker Hershey plans to Double-digit percentage price The increase was due to rising cocoa prices.
Management said cocoa prices had slowed in October, but It remains 70% above 2023 levels and is likely to increase in 2026. Hershey has raised costs to consumers to keep up with other competitors, pointing to a low level of industry synchronization when it comes to pricing.
“There have been times in history when everything worked in sync,” Steven Voskuil, Hershey’s CFO, told investors. “Now I think everyone is acting more accurately and strategically.”
