Circana Lowers Food Industry Sales Expectations for 2026

Market data firm Circana this week released its revised 2026 outlook for the U.S. food and beverage retail sector, lowering predicted total retail dollar sales growth to 2-4% from its August estimate of 3-5%. That growth will be driven entirely by price increases, with volumes being flat or slightly negative.

The revision “points toward continued volume tightness amid ongoing demand challenges,” the company said. “Meanwhile, price expectations are expected to moderate due to evolving price trends and notable shifts in consumer behavior.”

“Although recent policy changes have provided some tariff relief, rising supply costs in packaged goods continue. The retail environment, marked by intense price competition and the adoption of AI-supported technology, is helping to keep price growth in check even as cost pressures persist.”

Consumer confidence remains weak, prompting shoppers, especially in low- and middle-income groups, to pull back on discretionary spending and focus more on price-value optimization. Premiumization is likely to slow, and value-seeking behaviors are intensifying.

On the other hand, fresh categories are poised for higher demand, driven by healthy living trends and increased attention to product ingredients, as well as the growing influence of weight-loss drugs.

“Our revised 2026 outlook reflects a market that is tightening and more challenging, but not without growth vectors,” said Sally Lyons Wyatt, global executive vice president and chief advisor at Circana.

“While pricing pressures and cautious consumer sentiment are shaping a more measured growth trajectory, the food and beverage sector continues to demonstrate resilience and adaptability,” she continued. “Brands and retailers that prioritize affordability, channel flexibility and personalized experiences will be best positioned to succeed in 2026’s competitive landscape.”

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Circana expects F&B value sales across Europe to continue to grow around 4% in 2026, mirroring trends seen through 2025. This anticipated growth will be primarily driven by deeper levels of promotion to support sales velocity and the continued expansion of private labels, now accounting for 44% of F&B value — an increase from 41% three years ago.

In Australia/New Zealand, Circana projects unit sales to accelerate by 2.5% in 2026. The improvement in the consumer and economic environment will support spending. Increased demand, amid spikes in price/mix, will nudge value growth upwards of 6% and help to offset slowing population growth.