Grocery Sales Outlook: June 2025

Amidst all of the uncertainty and angst, grocery sales are having a very good year.  Up 3.3% YTD and up 2.7% in June versus last year. We can see in the chart below that 2.4% of the 2.7% was due to food inflation and the remaining 0.3% was due to unit growth. I was anticipating the June numbers to see if units were going to continue to trend down or rebound. As we mentioned in last months post, we expected a month or two of soft units and then a gradual rebound back to something close to 1%.

Looking at the Grocery Sales inputs and our forecast assumptions, we see CPI FAH is expected to increase over the summer and then slow down in the fall. Home prices are expected to continue their downward trend, while Real Disposable Income growth is expected to move largely sideways. This translates into a grocery sales forecast which is softening a bit in the back half of the year. From January to April, we were growing in the 3% to 4% range, but expect the last half of the year to grow in the 2% to 3% range.

Looking at the running forecast, we can see the forecasts have been coming down a bit as the CPI FAH has come down. It also appears that the forecast is missing on the high side but we do expect this gap to close a bit.

For the remaining six months, we expect grocery sales to grow at about 2.6% YOY. This is bracketed by simulated bounds of about 2.2% to 3.1% (see chart below). Thus, the first six months grew at 3.3% and the last half will likely grow around 2.6%, so we can expect 2025 to come in around 2.9% which is much higher than last years 1.7% growth.

Overall 2025 Grocery Sales are looking pretty good, and we had such a strong first six months, that even with a soft back half, we will have a descent year.