After years of price increases, shoppers may start to see some signs of relief at the grocery store as food giants look to reignite growth.
Cheerios and Nature Valley bar maker General Mills said last month it cut prices on nearly two-thirds of its grocery products in North America, resulting in an uptick in product volume. PepsiCo also plans to lower prices this year across some of its food products as it looks to improve affordability.
Consumer inflation concerns have weighed heavily on product volumes in recent quarters. PepsiCo noted in October that volumes for snacks in North America dipped 4%, while beverages slumped 3%. Other food manufacturers, such as Conagra Brands, Kraft Heinz and J.M. Smucker, posted declines in volumes.
“Consumers represent two-thirds of the economy,” said Brian Choi, a managing partner and CEO of The Food Institute. “They’re tapped out.”
Food-at-home prices are forecast to be up 2.3% in 2026, a slight improvement from last year, according to data from the USDA’s Economic Research Service. Despite the increases, they mark a sharp decline from the COVID-19 pandemic when inflation on food prices hit a four-decade high.
Much of the recent price increase has come from commodities such as coffee and ground beef, which are up 18.8% and 14.9%, respectively, during the last year, Labor Department statistics showed. Candy and chewing gum prices jumped 10.1%, and essentials such as bananas, lettuce and cereals are also all more expensive.
General Mills noted that high prices are pushing more shoppers to purchase food that is being discounted, particularly among consumers earning $100,000 or less.
PepsiCo, which is looking to lower prices as part of a turnaround plan, has an “opportunity to reinvest in value in a more substantial way,” Ramon Laguarta, the beverage and snacking company’s CEO, said in December.
“There’s a big reset of affordability because we see the consumer struggling in the U.S. and in many Western countries,” he told The Wall Street Journal in an interview.
Despite some cuts, there are still categories where food makers are raising prices to offset inflationary pressures. Sweets maker Hershey in 2025 said it would put in place a double-digit percentage price increase due to elevated cocoa costs.
Executives noted in October that while cocoa prices have moderated, they remain 70% above 2023 levels and are likely to increase in 2026. Hershey raised consumer costs to catch up to other competitors, noting the industry is less synchronized when it comes to pricing.
“There was a time in history where everything moved in lockstep," Steven Voskuil, Hershey’s CFO, told investors. “Now I think everyone is more precise, more strategic.”
