U.S. consumers are no longer just cutting back; they are recalibrating how they buy, according to Circana Compass research released by Circana LLC. The U.S. retail food and beverage industry grew 2.2 percent in the first half of 2026, and Circana projects growth will settle into a 2-3 percent range in 2027 as shoppers optimize spending amid financial pressure, shifting lifestyle priorities and digital, AI-assisted shopping behavior.
The findings signal a return toward pre-pandemic growth norms and a market entering a sustained period of rationalization, according to the firm.
“Consumers are no longer simply trading down or cutting back,” said Sally Lyons Wyatt, global executive VP 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.”
The first-half growth was in line with Circana’s forecast of 2-4 percent. Volume growth was flat as expected, reflecting tightening consumer behaviors. Price/mix grew 2.3 percent, landing on the lower end of the expected range due to uncertainty in fresh food pricing, which rose 0.4 percent in price/mix versus a year ago, while packaged food categories trended as expected, rising 3.7 percent in price/mix versus a year ago as cost pressures continued.
Circana expects volume sales 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 food and beverage sales through April grew 2.7 percent on 1.9 percent growth in price/mix. Circana expects high and rising inflation across Europe to boost value growth through the remainder of 2026, reaching 4 percent 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, the firm said.
In Australia and New Zealand, Circana anticipates food and beverage sales growth to remain above 5 percent, 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 industry growth of almost 7 percent CAGR between 2019 and 2024, driven by the pandemic and subsequent high inflation, Circana expects U.S. retail food and beverage growth to proceed in the 2-3 percent range in 2027, closer to pre-pandemic averages of 2.5-3.5 percent. Tight volume trends will continue as consumers enter a new period of rationalization in the CPG space, according to the firm, with lower population growth also accounting for slower growth versus 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.
Circana identifies three drivers shaping the consumer landscape in 2027 and beyond: pressured wallets, balanced living and increasing algorithmic influence.
As households navigate ongoing financial pressures, consumers are becoming more intentional about where they spend, balancing health, wellness and enjoyment, a shift the firm says is further shaped by growing GLP-1 adoption. At the same time, expanding e-commerce engagement and emerging AI-powered shopping tools are making product discovery more informed and efficient. The result is a more selective consumer who cuts excess, right-sizes purchases and remains willing to invest in preferred products that align with their goals, according to the research.
Circana provides technology, AI and data to consumer packaged goods companies, durables manufacturers and retailers. The company’s Liquid Data technology platform is trained on six decades of domain expertise.