The average US consumer is feeling financially stretched, squeezed and uncertain. In a word – they’re beleaguered.
The economic optimism that was evident in the first couple months of 2025 has given way to financial anxiety and uncertainty, due to a variety of reasons. The list is long: tariff-related jitters, stagnating wage growth, high interest rates, high housing costs, the resumption of student loan payments, recession fears and continued higher prices at the grocery store.
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According to the latest data from the US Bureau of Labor Statistics, inflation – the overall Consumer Price Index (CPI) – dropped 0.1% in March but grocery inflation ticked up 0.4%. On a yearly basis, food-at-home prices came in 2.4% higher last month compared to March 2024. The CPI for food-away-from-home also increased in March, up 0.4%.
Actual prices at US grocery stores increased more in March than the above government statistics show, according to FMI (Food Marketing Institute). Based on monthly category reports provided by 210 Analytics and data from Circana, FMI says prices across all food and beverage categories rose 3.3%, including a 3.8% increase in the fresh perimeter and a 3.5% increase in centre-store.
FMI’s new, April 2025 Grocery Shopper Snapshot research report shows a negative shift in consumer sentiment. According to the report, the majority of US consumers are becoming increasingly concerned and pessimistic about the future.
“Looking at 2025 overall, consumers’ attitudes have become apprehensive,” according to the report’s author, Allison Febrey, FMI’s senior manager of research & insights.
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By GlobalData“When asked about how they are feeling about 2025, consumers shared more negative (38%) feelings than positive (36%), for the first time this year. This has been a large shift in a short amount of time – going back to January, over half of grocery shoppers reported positive feelings for the year (2025) ahead.”
FMI says numerous concerns may be impacting consumers’ new, more negative attitudes for the year ahead. For example, when thinking about the US economy overall, 67% of shoppers are extremely or very concerned. A similar portion (65%) are concerned about inflation and almost half (46%) are concerned about the job market.
Tariffs are also weighing heavily on the minds of grocery shoppers, according to the FMI report. For example, 75% are concerned that tariffs will increase the price of food at the grocery store. Additionally, 57% are worried about the availability of grocery items because of tariffs, and 57% are concerned about being able to afford groceries due to tariffs.
Tariffs are also weighing heavily on the minds of grocery shoppers, according to the FMI
The cumulative effect of all these current economic challenges has led to what you might call a ‘vibecession’, where consumers feel pessimistic about the economy despite the absence of a formal recession. The economic uncertainty among grocery shoppers is evident in the April FMI research report.
The positive news for packaged foods companies is that although beleaguered, consumers are shopping at grocery stores more than they are consuming food away from home and continue to show resilience in the face of economic uncertainty.
Today’s grocery shopper is value-conscious, increasingly health-aware, digitally fluent and increasingly sceptical of marketing fluff. They’ve tightened their budgets but not their standards. They still want food that’s fast, safe and flavourful – but also affordable, nutritionally sound and transparent in sourcing. They’re shopping at discount grocers and dollar stores just as much as they’re scrolling TikTok for budget meal hacks and brand deals. The modern shopper is more strategic than they are loyal. They’ll swap national brands for private-label alternatives if they perceive the latter to offer more value.
It’s key for packaged foods companies to be aware of this change in consumer mindset. To stay competitive and appeal to the beleaguered US consumer, packaged foods companies need a recalibration of their strategies and tactics. Here are several key areas (with a strategy tip for each included), where brands can act:
Rethink value – but not just price
Consumers aren’t just looking for “cheap;” they’re looking for “worth it”. Brands should focus on communicating the total value proposition: Is it healthier? More versatile? Longer-lasting? A frozen meal that tastes homemade, or a pantry item that doubles as an ingredient for multiple dishes, speaks to practicality and stretch – two key decision points for today’s households.
Strategy tip: Launch a “Smart Family Meals” line featuring bulk-sized, nutritionally balanced options designed to feed four for under $10. Include easy prep instructions and QR-code access to bonus recipes.
Invest in loyalty – not just coupons
Loyalty isn’t just about discounts; it’s about relationships. Consumers want to feel heard and appreciated. Personalised experiences, community engagement and shared values create the kind of stickiness that discounts alone cannot.
Strategy tip: Develop a branded mobile app that rewards not just purchases but engagement – think gamified health goals, recipe sharing, feedback polls. Use AI to personalise product suggestions and offers based on dietary preferences and household size.
Make nutrition affordable and simple
It’s no longer acceptable to assume low-income consumers don’t care about health. On the contrary, they are disproportionately affected by diet-related diseases. Packaged foods companies and the food industry as a whole must ensure that nutritious products are not only available but accessible.
Strategy tip: Reformulate core products to reduce sugar and sodium, increase protein and fibre and clearly communicate the nutritional benefits. Create “Nutrition for All” SKUs with affordable pricing tiers for budget-conscious shoppers. As an added bonus, consumers will see value beyond a price-only focus in this approach.
Radical transparency and ingredient literacy
Today’s consumers – particularly Millennials and Gen Z – are demanding to know what’s in their food, where it comes from and how it’s made. They want ingredient labels that don’t read like a chemistry exam. They want brands that talk to them like adults.
Strategy tip: Implement front-of-package ingredient scoring (e.g., a 0–100 “clean label” index), sourced from independent third parties. Use TikTok and Instagram to offer behind-the-scenes content on sourcing, product development and company ethics.
Create products that reflect modern life
Busy lifestyles call for convenience but not at the expense of taste or health. Consumers are looking for functional foods that match their habits, such as high-protein breakfast bars, on-the-go lunches, snacks that power a workout or support focus at work.
Strategy tip: Develop lifestyle-oriented sub-brands. For example, a “Workday Wellness” snack line designed to support energy and brain health during the 9-to-5 grind. Partner with fitness influencers, nutritionists, or even large employers for co-branding and distribution.
Innovate around convenience and versatility
Consumers are cooking at home more but they’re still pressed for time. Products that simplify meal prep – think pre-seasoned grains, multi-use sauces, or frozen shortcuts – will appeal to exhausted parents, overworked young professionals and seniors living alone.
Strategy tip: Position products as versatile “kitchen hacks” that fit multiple meals across the week. Use social content to show how one product becomes four meals.
Economic uncertainty is difficult for both consumers and packaged foods companies. The key for both is to adjust and adapt. For packaged foods brands, that means meeting consumers where they are today in 2025.
Today’s consumer is beleaguered, yes – but also informed, empowered and increasingly selective. The brands that win will be the ones that understand that “cheap” isn’t enough. What the American consumer wants now is simple: Respect my wallet, respect my time, respect my choices. And if brands can do that, they’ll earn a place in their grocery cart.
