Grocery Units Have Fallen Every Month Since February.

Retail and food services sales were $763.6 billion in July, down 0.6 percent from June and up 5.0 percent from July 2025, according to advance estimates the Census Bureau released Friday. Forecasters had expected a small gain. The monthly decline clears the survey’s 90 percent confidence threshold, which June’s 0.2 percent increase did not.

The drop was not broad. General merchandise stores rose 0.3 percent for the month and clothing stores posted the largest monthly gain of any category at 1.9 percent. Motor vehicle dealers fell 1.8 percent and nonstore retailers fell 2.2 percent, the report’s largest decline. Grocery stores fell 0.1 percent for the month and rose 0.8 percent against July 2025.

That last figure is the one to hold. Food-at-home prices rose 2.7 percent over the same twelve months, according to the Consumer Price Index released two days earlier. Dollar sales growing roughly two points below price growth points toward fewer units moving, and two research firms have measured that directly rather than leaving it to inference.

Two Firms Measured The Same Contraction On Separate Panels

Bain and Company, analyzing NielsenIQ data, reported US grocery units down 1.8 percent year over year in June 2026, against roughly flat a year earlier. The decline is not a single month. After a 1.7 percent uptick in January, units fell for five consecutive months: down 2.0 percent in February, 0.4 percent in March, 2.2 percent in April, 1.9 percent in May, and 1.8 percent in June.

Circana measured it independently and reached the same direction, reporting grocery store unit sales down 1.1 percent in June while dollar sales rose 1.4 percent, in its Integrated Fresh report covering MULO+ retailers.

The three measurements do not share a universe, which is part of why they are worth stacking. Census counts grocery stores separately from warehouse clubs and supercenters. The NielsenIQ series Bain analyzed covers traditional grocery merchandise, including food and beverages, health and beauty, and household and pet care, across all retail outlets. Circana’s covers MULO+ retailers.

Bain attributes the contraction to no single shock. In its account, Supplemental Nutrition Assistance Program participation dropped sharply after benefit reductions in late 2025 and tighter eligibility rules in early 2026, gasoline prices surged roughly 20 percent in March, and grocery prices have risen 33 percent cumulatively since 2019. Bain’s Consumer Lab survey found 80 percent of Americans still trying to spend less and 28 percent actively cutting.

Walmart Says Its Own Units Are Growing

John Furner told analysts in May that transaction growth in the U.S. was the strongest in six quarters and that growth in transactions and units was driving the top line. Walmart U.S. comparable sales grew 4.1 percent excluding fuel, U.S. net sales reached $117.2 billion, global eCommerce grew 26 percent, store-fulfilled delivery grew roughly 45 percent, and marketplace sales grew nearly 50 percent. Furner said the company had about 7,200 rollbacks in place, extending price investments begun in the second half of the prior year.

Rainey put like-for-like inflation in the quarter at a little more than 1 percent. Against food-at-home prices running 2.7 percent nationally in July, that gap is the mechanism behind the share shift the research describes. Separate NielsenIQ Homescan panel data, cited in Bain’s analysis, shows value players including discount, mass, and club retailers gaining consumers, with 22 percent of shoppers reporting they are exploring more retailers in search of deals.

None of which resolves the category problem for a brand. Bain’s own conclusion is that gaining shoppers does not resolve the unit problem for value-oriented grocers. A retailer can grow units by taking them from other retailers while the total pool of units shrinks. Suppliers should consider whether their own volume trend is being measured against Walmart’s growth or against the category’s contraction, because those two comparisons produce different conclusions from the same shipment data.

National Brands Are Holding Dollars And Losing Units

The Private Label Manufacturers Association, using Circana data, reported that store brand unit sales rose 0.2 percent in the six months ending June 14 while national brand units fell 0.5 percent. Store brand unit share reached 23.8 percent, an all-time high.

The dollar figures from the same period run the other way. Store brand dollars were flat year to date while national brand dollars rose 2.2 percent, leaving store brand dollar share at 21.2 percent, below its unit share and below its own record. A brand growing dollars 2.2 percent while shipping fewer units has raised price into a shrinking category, and the private label competitor holding dollars flat has taken units instead.

That is the same units-versus-dollars split the category data shows, one layer down and attached to a specific competitive outcome. For a 1P supplier, the diagnostic is direct: dollar growth built on price against declining units is the national brand pattern, not an exception to it. The fall planning question is whether the next round of cost recovery accelerates the unit loss, and the private label unit share record suggests where those units are going.

Third-party sellers have limited exposure to this. Grocery volume contraction is a first-party problem, and Marketplace sits outside it. The one figure in Friday’s report that looks like a Marketplace signal, the 2.2 percent nonstore decline, should be discounted twice over. Nonstore retailers is a kind-of-business classification covering firms whose primary activity is selling outside a store, not a measure of total online sales, and Census reports e-commerce as a separate quarterly series with the second quarter estimate due Tuesday at 10 a.m. Eastern. The line also carries a median coefficient of variation of 2.8 percent, among the highest in the report, with advance-to-final revisions averaging negative 0.2 points over the past year.

The consumer condition underneath all of this deteriorated further in early August. The University of Michigan’s preliminary sentiment index fell about 8 percent to 51.0, ending two months of improvement and landing well below the roughly 55 expected. Expectations fell harder than current conditions, with expected business conditions down 11 percent for the short run and 17 percent for the long run. The survey reported the largest declines among older consumers, lower income consumers, and those without a college degree, groups it described as “particularly vulnerable to any erosion of purchasing power”. Across all respondents, 8 percent expect their income to outpace inflation over the coming year, down from 18 percent in December 2024.

Walmart has its own version of that reading. Rainey said on the first quarter call that higher income shoppers are spending with confidence while lower income consumers are more budget conscious and may be under financial stress, and pointed to the fuel business, where the number of gallons customers bought per fill-up fell below ten for the first time since 2022. He also said the $175 million fuel headwind that cost 250 basis points of first quarter operating income growth would probably be larger in the second quarter if prices held, and Friday’s Census data showed gasoline stations still up 16.2 percent against last July. Walmart guided to second quarter constant currency net sales growth of 4 to 5 percent, adjusted operating income growth of 7 to 10 percent, and adjusted earnings per share of $0.72 to $0.74, on guidance the company said assumes no impact from IEEPA tariff refunds. Results come Thursday, August 20, with Furner and Rainey hosting the call.

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