Top CPG executives said shoppers haven’t returned at the rates they expected, prompting some companies to roll back prices and prioritize innovation to rejuvenate growth.

U.S. food manufacturers are warning of a prolonged downturn in spending as inflation and lingering global uncertainty give cash-strapped grocery shoppers little incentive to purchase more cereal, chips and cookies.

After several years of inflation-driven price increases, consumers appear tapped out. Despite investments in areas such as innovation, marketing and packaging changes, shoppers still haven’t returned to the category at the level many executives had expected.

“I am worried about the U.S. consumer,” Dirk Van de Put, Mondelēz International’s CEO, said in an interview at the Consumer Analyst Group of New York Conference. “I don’t see how anything will change until the disposable income of the consumer goes up or cost starts to go down in a big way.”

The latest company to warn of a gloomy spending environment is Cheerios maker General Mills. The company told attendees this week it expects sales for its 2026 fiscal year to drop between 1.5% and 2.5%, which, if realized, would be its third straight year of sales declines.

Food-at-home prices are forecast to be up 1.7% in 2026, a slight improvement from 2.3% last year, according to data from the USDA’s Economic Research Service. The increase actually marks a reprieve from the COVID-19 pandemic when inflation on food prices hit a four-decade high. In 2022 alone, prices surged 11.4%, the government data showed.

With prices still rising, albeit at a slower rate, consumers are seeking out promotions, trading down to cheaper alternatives or cutting back on how much they buy altogether. That dynamic isn’t expected to change in the short-term, Van de Put predicted, with consumers facing “a very tough situation” for potentially the next three years.

Conagra Brands CEO Sean Connolly said even though the Slim Jim and Healthy Choice manufacturer was still feeling the effects of inflation on its business 14 months ago, it decided to hold off on another wave of price increases after implementing them four years in a row.

“We said, ‘You know what? The consumer is just reaching the breaking point. So we’re going to eat that last wave of inflation, keep our price points where they were,’ ” Connolly told Food Dive. The executive noted that other companies that chose to take additional price increases in 2025 now find themselves in “corrective mode.”

“They just pushed the consumer too far,” he said.

Source https://www.fooddive.com/news/food-giants-cast-a-sour-mood-on-consumer-spending-in-2026/812403/