Today's Article

"Grocery stores have started to realize that they're seeing drops in their sales and their unit sales. And so I think they're really finally realizing that they need to do something different."

An analysis by Bain & Company points to a nearly 2% drop in grocery unit sales over the last year.

Bain says higher prices are one reason, a trend that food industry analyst Phil Lempert doesn't expect to 1reverse soon.

"We've got climate change that's affecting our 2growing conditions. We've got the tariffs. We've got the war in Iran that's affecting 3fertilizerand diesel fuel."

Households are also 4grappling with higher gas prices.

And Bain says there's been a 5drop-off in households receiving federal food benefits.

Jadrian Wooten, professor of economics at Virginia Tech, says consumers have been quietly making more choices in the grocery aisles.

"It's trying to figure out where can you make those 6substitutions to 7absorb the price increases in other places."

Meanwhile, major retailers like Walmart, Kroger, and Giant Eagle have made summer 8price cuts on select items to 9entice shoppers.

"Consumers are going to start seeing more of that where grocery stores are starting to actually think more carefully about how do they increase sales. And so they might actually be seeing discounts on store brands, more active coupons."

Lempert says 10net profit for grocers is already so small; it doesn't 11leave room to cut prices 12across the board.