The U.S. retail food and beverage (F&B) industry grew 2.2% in the first half of 2026, and Circana projects growth will settle into a 2-3% range in 2027 as shoppers optimize spending amid financial pressure, shift lifestyle priorities, and increase use of digital, AI-assisted programs, according to Circana Compass research released by Circana LLC.
The findings signal a return toward pre-pandemic growth norms and a market entering a sustained period of rationalization.
“Consumers are no longer simply trading down or cutting back,” says Sally Lyons Wyatt, global EVP and chief advisor at Circana. “They are becoming more intentional and efficient. Whether through pack-size optimization, private label and brand selection, AI-assisted shopping, or reducing waste, shoppers are finding smarter ways to achieve the outcomes they want while navigating persistent financial pressures.”
Key takeaways:
· Volume growth was flat as expected, reflecting tightening consumer behaviors.
· Price/mix grew 2.3%, landing on the lower end of the expected range due to uncertainty in fresh food pricing – rising 0.4% in price/mix versus a year ago – while packaged food categories trended as expected, rising 3.7% in price/mix vs. a year ago as cost pressures continued.
· Volume sales are expected to remain flat through the balance of 2026 as strain on wallets persists and consumers grow more efficient in their spending. Price/mix growth should continue at similar rates, marked by steady, positive product mix shift, higher but stabilizing price growth in packaged goods, and rising price growth in fresh foods.
· In Europe, year-to-date F&B sales through April grew 2.7% on 1.9% growth in price/mix. Expect high and rising inflation across Europe to boost F&B value growth through the remainder of 2026, reaching 4% or more for the year. Inflation-led high price points are likely to shift preferences toward lower-priced, smaller pack formats, aiding unit growth across all markets while volume remains hampered.
· In Australia and New Zealand, anticipate F&B sales growth to remain above 5%, due to price inflation driven by cost-related price increases and consumers spending more on premium products. Grocery volumes are supported by a migration of spend from discretionary retail into essentials, consistent population growth, elevated promotional activity, and private label investment.
· Following a period of outsized industry growth of nearly 7% CAGR between 2019-2024, driven by the pandemic and subsequent high inflation, expect U.S. retail F&B growth to proceed in the 2-3% range in 2027, closer to pre-pandemic averages of 2.5-3.5%. Tight volume trends will continue as consumers enter a newer period of rationalization in the CPG space, optimizing spending decisions amid ongoing financial pressures, evolving lifestyle priorities, and rapidly changing digital shopping behaviors. Lower population growth also accounts for slower growth vs. pre-pandemic levels. Moderate price/mix growth will continue to be supported by product mix gains as shelf increases slow outside of uncertain commodity shifts.
