There is supposedly an ancient Chinese curse that says, “May you live in interesting times.” It is a great line. It is also probably not Chinese, may not be a curse, and may never actually have been said by anyone who was Chinese.
The saying has been attributed to British statesman Sir Austen Chamberlain, who is said to have heard it from an unnamed Chinese diplomat. The closest thing to the sentiment with any historical basis appears to come from a 17th-century Chinese text that essentially argued that it was better to be a dog in peaceful times than a human being during periods of chaos.
Regardless of its dubious origins, the sentiment is hard to argue with.
If there is one industry that has most certainly been living in interesting times, it is the grocery business. Every week seems to bring another problem. Tariffs. Labor costs. Commodity inflation. Supply chain disruptions. New technologies. Shrinking traffic in some markets and aggressive expansion at others. Shifting consumer habits. The march toward consolidation among retailers, wholesalers, and brokers alike. Recalls that now require increasingly precise tracking from farm to shelf… the list goes on.
Almost any one of these issues could seriously damage a company. Combined, it’s a mess. At some point, the industry’s collective emotional support group is going to need a larger room.
Underneath all of this disruption is a more important story: the consumer. The consumer is still spending. That is the good news. The problem is that the headline numbers – like the unemployment figures placing our unemployed at just 4.1% – may be telling us only part of the story.
Higher-income consumers continue to demonstrate a remarkable ability to absorb higher prices. For consumers lower down the economic ladder, the situation is considerably different. They have less flexibility, fewer places to find savings, and far less tolerance for another round of price increases. That raises the question that may ultimately matter more than any individual commodity price or tariff announcement: How much more can the consumer absorb?
There is a point at which consumers stop adjusting and start breaking. They trade down, change stores, abandon brands, reduce quantities, and simply eliminate purchases altogether. One could make the argument that much of this has already happened. On the flip side, I was out recently at a restaurant outside D.C., and there was a line waiting for the doors to open at 11:30. A line.
Until the food-away-from-home trendline – a category notably more expensive than food purchased at grocery stores – begins to break down, we should expect more of the same. Editor’s note: We’ll have to keep a close eye on that canary.
What is changing are the traditional rules of grocery retailing and CPG marketing. They’re beginning to look less reliable. Brand loyalty is being challenged by price. Convenience is being weighed against the cost of convenience. Store loyalty is being challenged by value.
Consumers have become considerably more sophisticated about promotions, package sizes, and pricing. They know when a package has gotten smaller. They know when a promotion isn’t really a promotion—looking at you, “Black Friday Deals.” They know when the price on the shelf doesn’t make sense. And increasingly, they know where else to go to find value. That puts retailers in a difficult position: they have less room to pass inflationary costs along without giving consumers another reason to shop elsewhere.
Just when it looked as though the grocery industry might finally be getting some breathing room on inflation, the commodity markets are reminding us that this business rarely gets to stay comfortable for very long. Wheat, corn, and sugar are all growing issues. And they’re particularly important to watch because they reach much further into the grocery basket than some of the commodities that drove the earlier inflationary wave.
Not that our diesel prices have gotten better. As of the latest EIA data, East Coast diesel prices are running at roughly $5.50–$5.60 per gallon, with the region particularly exposed because distillate inventories are at historically low levels. That’s almost 40% higher than February’s $3.90-$4.00 average before our Iran quagmire started. Oil topped $100 a barrel as this edition was working its way to press.
The outlook is not encouraging: tight global refining capacity, geopolitical disruptions, and approaching winter demand are expected to keep diesel prices elevated. Like diesel fuel, wheat, corn, and sugar are foundational inputs. They touch far more of the grocery basket than their individual categories might suggest.
Wheat is embedded in an enormous range of bakery, snack, and packaged-food products; sugar touches beverages, confectionery, bakery, and countless processed foods; and corn reaches both directly into food production and indirectly into meat, dairy, and eggs through animal feed. When these three commodities move higher at the same time, the potential impact extends well beyond a handful of supermarket categories.
The broader manufacturing environment remains difficult as well. The August ISM Manufacturing Prices Index was 71.1, indicating continued increases in raw-material prices, with food, beverage, and tobacco products among the industries reporting higher costs.
For grocers, that is a particularly difficult environment because the industry has spent the past several years adapting to – and selling consumers on – a return to more normal inflation. The problem is that prices never returned to normal; only the rate of increase did.
The Canada situation adds another headache, particularly for Northeast retailers. Connecticut alone imported approximately $5.7 billion in goods from Canada in 2025, and the state’s retailers have already raised concerns about the impact of the new 50% tariff on many Canadian imports. Canada has also imposed retaliatory tariffs on U.S. goods. This national trade-policy issue is becoming a very specific Northeast grocery problem with the products, suppliers, and distribution networks which cross the border every day.
There is also an operational lesson here that could outlast the current tariff dispute. Retailers and manufacturers need to know exactly which products have been affected, when the cost changed, how much of that cost was passed through and what happens when a tariff changes or disappears.
As tariff rates continue to move, product-level documentation, tracing, and price attribution will become increasingly important for everything from vendor negotiations and financial reporting to potential refunds or credits. Tariff tracking should probably become a permanent part of grocery price management rather than a temporary exercise.
As this edition was being finalized we were betting on whether the Fed under Kevin Warsh would raise interest rates to combat rising inflation. The bond and prediction markets were expecting a quarter-point hike – and they got it. The previous weeks’ CPI and Labor data showed a healthy and resilient consumer. The data runs counter to much of the information we’re hearing from front-line grocery retailers serving those customers.
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The most important question facing the CPG industry: Is it time for manufacturers to make an aggressive reset and begin taking real price out of the system?
For decades, manufacturers have generally preferred promotional activity, temporary price reductions and package-size changes to permanent reductions in base prices. There was logic to that strategy. Manufacturers didn’t necessarily trust that a lower wholesale price would make its way to the consumer, and once a price goes down, taking it back up is considerably more difficult.
But the consumer has changed. Shoppers know about shrinkflation. They know when a product simply doesn’t represent good value and are considerably more willing to switch brands. That is why the recent movement by some manufacturers toward actual price reductions on selected products is worth watching.
It doesn’t mean a return to broad-based deflation or that manufacturers will abandon margin discipline. It does suggest that some companies are beginning to recognize that volume is becoming harder to protect when consumers believe the price has simply become too high.
The grocery industry has spent several years dealing with inflation, and much of that time the central question was how high prices could go. The next question may be very different: How much price could the industry actually reduce?
PepsiCo took the bold step of testing the proposition that lower prices will bring consumers back earlier in February. The company cut prices on some of its biggest snack brands by as much as 15%, and the initial volume response was encouraging. North American food volumes rose 2% in the first quarter.
By the second quarter, however, volumes had flattened despite additional price reductions. We’ll see how this continues to play out over subsequent earnings reports. The lesson may be that affordability matters, but price alone is no longer enough to overcome changing consumer habits, private-label competition and a consumer who is becoming more selective about what goes into their shopping basket.
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Capital continues to flow toward retailers and markets where operators believe they have a compelling proposition. Long Island-based Uncle Giuseppe’s Marketplace, for example, is preparing to enter Pennsylvania with two roughly 58,000-square-foot stores planned for King of Prussia, PA, and Moorestown, NJ, with openings expected in late 2027.
The grocery industry isn’t necessarily shrinking; it is reallocating. Retailers are increasingly asking whether an individual store earns its right to exist while simultaneously investing in locations, markets and capabilities where they believe consumers will respond. That is a healthier way to understand the current wave of store openings and closures than simply counting doors.
The same dynamic is playing out in Connecticut. A year after Wegmans entered Norwalk, established competitors including Stop & Shop, ShopRite, Walmart, and even Stew Leonard’s have experienced declining visits. The lesson is not simply that a new competitor can take market share. It is that a strong operator can reset the competitive standard for an entire market. We are seeing a similar dynamic in the continued expansion of Aldi, as its value proposition forces competitors to respond.
That response increasingly goes beyond price. Retailers are looking for ways to give consumers a specific reason to choose their stores, whether through value, convenience, assortment, or a better shopping experience.
ShopRite, for example, is expanding Instacart-powered Caper Carts across its Staten Island stores, allowing shoppers to scan products, weigh produce, track their running total and apply loyalty savings as they shop. Giant Food has taken a different approach, rolling out in-store kiosks that allow shoppers to automatically load weekly circular digital coupons and customized rewards offers to their accounts.
ACME, meanwhile, is adding more premium products at selected Philadelphia-area stores, including specialty cheeses, organic and premium offerings, and larger meat assortments as it looks to compete more effectively with Whole Foods and Wegmans.
The competitive battle is therefore becoming more sophisticated. Retailers are no longer competing simply for the closest store or the most convenient location; they are competing simultaneously on value, convenience, assortment, and experience. The retailers that understand which of those levers matter most to their particular customer—and invest accordingly—will be the ones best positioned to earn the next grocery dollar.
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Federal health officials have declared that the massive, 21-state Cyclospora outbreak linked to iceberg lettuce is over. The last known illness began August 17, and new infections tied to the outbreak have fallen sharply. Those facts gave the Centers for Disease Control and Prevention enough confidence to close the active outbreak response… without actually declaring how the outbreak began back in July.
All this occurs while another recall is underway for Martina-brand mangoes distributed to select Walmart stores in Connecticut, New York, New Jersey, and Pennsylvania. FDA sampling identified Salmonella in mangoes from the farm. The important development isn’t the recall itself.
It is the increasing precision with which the industry can identify a problem. We are moving away from a world in which a retailer might know that a particular commodity or category is implicated and toward one in which the industry can identify the specific product, lot, supplier, and distribution path. That is both a food-safety improvement and a meaningful operational advantage.
That is where technologies such as the new 2D barcodes become increasingly important. The barcode won’t solve food safety, but the ability to attach considerably more information to an individual product can make recalls faster, more targeted, and less disruptive. Instead of pulling an entire category from a shelf, retailers can increasingly identify exactly what needs to be removed.
It remains to be seen if our latest round of food safety outbreaks will hasten the conversion to 2D barcodes even before the planned 2027 deadline.
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JOH’s acquisition of Fresh Approach Sales & Marketing adds another example of smart consolidation taking place beyond the retail side of the industry. Let’s face it, most retailers, brokers, and wholesalers are all looking for scale. But some of the biggest players in grocery have proven that scale alone isn’t enough. The companies best positioned for the next phase will be those that use scale to improve their proposition rather than simply becoming larger.
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Companies are preparing themselves for a different operating environment. The amount of executive changes coming across our desks is striking for an industry that has historically valued consistency. Kroger alone has added two significant pieces to its senior leadership team in recent weeks, naming Nate Faust as its first executive vice president and chief e-commerce officer and Mark Ibbotson as executive vice president and chief store operations officer.
Both bring extensive Walmart experience, with Faust focused on strengthening Kroger’s digital business and Ibbotson taking responsibility for the physical store operation.
Walmart itself has undertaken a much broader leadership reset this year, with John Furner succeeding Doug McMillon as CEO and major operating responsibilities shifting across its U.S., international and Sam’s Club businesses.
Albertsons Companies has named former eBay and Hewlett-Packard CEO Meg Whitman executive chair of its board, creating a new leadership role as the grocer works to improve performance following a weaker-than-expected start to fiscal 2026.
Taken together with leadership moves at Sprouts, Trader Joe’s and others, the pattern suggests that retailers are not simply filling vacancies; they are deliberately reshaping their leadership teams around technology, productivity, omnichannel execution and a consumer who is becoming harder to win and retain.
Another personnel change of note is the venerable Stew Leonard’s entering its third generation of family leadership, with Blake Leonard becoming president and Jake Tavello becoming CEO. What is laudable about the Stew Leonard’s transition is not simply the personnel change, but the deliberate governance structure being used to avoid familiar generational family-business problems.
Retailers are investing in stores, products, and formats that work. Manufacturers are beginning to reconsider how much price consumers can absorb. Companies are using technology to make shopping easier, data to make decisions faster, and consolidation to build capabilities rather than simply increase size.
That may be the bigger lesson in all of this disruption. The grocery industry isn’t simply trying to get back to the way things were before inflation, tariffs, changing consumer behavior and technological disruption. The strongest companies are adjusting their businesses to operate differently.
It’s a tough environment out there, that much is certain. By all indications—economic, political, and even literal meteorological—the next few quarters don’t look any easier.
We are, most certainly, living in interesting times.