Across the food system, people are making more careful choices about how and where to spend.
Farmers are being squeezed from several directions at once: declining commodity prices, elevated or volatile input costs, and geopolitical instability disrupting trade and supply chains. Global net spending sentiment has fallen 24 percentage points since 2024. When margins tighten, farmers may cut back even on essentials like fertilizer—a short-term saving that could mean smaller harvests down the road, according to David Fiocco, Owen Stockdale, Tom Brennan, Vasanth Ganesan, and coauthors.
Shoppers, too, are becoming more selective. Food prices have risen faster than overall inflation, and 61 percent of consumers say price matters more now than it did two years ago. They’re looking harder at what delivers value, from trading down to lower-cost alternatives to cooking more meals at home.
For North American grocers, value “remains the central battleground,” write Bill Aull, Tom Kilroy, and coauthors. But winning on value now takes more than low prices. As shoppers balance trade-offs across price, quality, and convenience, grocers need pricing, promotions, loyalty, and customer experience to work as one.
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