A humble bowl of soup is a little.
That’s according to Campbell’s Co., whose iconic can is synonymous with it. The food maker said Monday that customers are increasingly robbing their condensed soup and mac and cheese offerings while moving away from the snacks.
“Consumers have been cooking at home at the highest level since early 2020,” Campbell CEO Mick Beixen said in a statement.
The company, which includes snack brands, Goldfish, Hanover Pretzel Snyder and Cape Cod Chip, has sold 5% snacks in the past three months. Meanwhile, its food and drink sales rose 6%. This is driven primarily by Lao pasta sauce and US soup sales.
Consumer outlook has improved somewhat in recent weeks, but many are deeply pessimistic about the direction of the economy under President Donald Trump’s ever-changing trade war, searching for bargains.
Households are “continuing to concentrate their spending on products that help them grow their food budgets and are increasingly intentional about purchasing discretionary snacks,” Beekhuizen told Campbell investors to call revenue.
“Snacks are losing ground as consumers have been narrowed down to inflation, shift spending to essentials and more intentional food choices,” an analyst at market research firm NIQ wrote in a recent note. “The era of luxurious and impulsive snacks has replaced the demands of value, quality and health.”
In a recent NIQ survey, 42% of consumers reported low snack purchases, while 37% said they searched more difficult to trade. Many have twice thought about branded snacks with more expensive names, and instead opted to opt for a more common alternative with those sold under private labels in convenience stores and supermarkets.
Snacks are narrowed down to inflation and shifting spending to essentials, leaving consumers losing ground.
NIQ Market Researcher
The snack market tightening has seen friction, with Oreo maker Mondels suing Aldi recently, claiming that supermarket operators have “blatantly” mimicking some of the cheap riff packaging designs of the iconic snack brand.
Mondels says the demand for snacks remains robust, but PepsiCo makes Ray and Doritos tips — says it’s finding success in serving customers at a low price. “We probably don’t feel good about consumers like we did a few months ago compared to where we were three months ago,” PepsiCo CFO Jamie Caulfield said in April. Snack Foods Giant also lowered its financial forecast for the year.
Food Shoppers ‘Hunt for Value also boosted Dollar General, saying on Tuesday it increased its annual sales sales outlook and gained market share in food. Dollar Store operators have ticked those profits as other retail giants, such as Target, have struggled to seduce budget-sensitive shoppers when grocery sales are tempted.
It is focusing on home cooking as it is rising almost twice as fast as grocery prices. Food prices rose 3.9% from April from the previous year, federal data shows, but food prices at home rose just 2% over the same period, slower than overall inflation.
That difference helps explain why many restaurant chains are weak in sales. McDonald’s last month reported the biggest decline in tie-store sales since the pandemic, with that scale down 3.6% in the first quarter. Darden Restaurant, which owns Olive Garden, also flagged sales at the beginning of the year that were weaker than expected, with Chipotle reporting the same store sale it had signed for the first time since 2020.
McDonald’s CEO Chris Kempchinski said despite efforts over the past year to counter the price hikes of the previous menu, everything but its wealthiest diners are increasingly away from the burger chain. Traffic from low-income consumers was “nearly double digits” compared to a year ago, with visits from middle-income diners slowing “around the same level.”
Kempczinski said the split indicates an economy that is “splitting” by moderate and less wealthy consumers “by increasing anxiety over the cumulative impact of inflation and economic outlook.”
In the meantime, restaurant operators are doing what they can to try selling to juice. Some leaned towards the growing appetite of chicken customers, and refreshed the place with sophisticated new looks and both.
These efforts can prove a difficult battle with the grocery aisle. There, the costs of some major purchases, such as eggs, are ultimately eased. However, there are still signs of tension in supermarket check-outs as shoppers adapt to higher overall costs that are not easily the basics of a fridge or pantry. More shoppers both fund their grocery purchases with installment loans and are behind those bills, finding a survey of recent lent trees.
Klarna, such a “buy now, pay later” service, recently said borrowers have struggled to clear their debts on the platform. A few months ago, the company became Walmart’s exclusive BNPL provider and worked with Doordash to offer installment loans for take-out meals.