Food industry warns prices will go up for rest of year

Campbell’s said it plans to raise prices by 4% to 5% on roughly 60% of its products. (Justin Sullivan/Bloomberg)

Food prices for the rest of this year are largely headed in one direction: up.

Conagra Brands Inc. has told retailers to expect increases on products including Healthy Choice and Banquet frozen dinners. Spice and condiment maker McCormick & Co. has said it expects higher prices to bolster results in the second half of 2026. And Campbell’s Co. said it plans to raise prices by 4% to 5% on roughly 60% of its products, mostly meals and snacks. 

Food and grocery companies’ efforts to keep prices down are sputtering following a sustained rise in energy and fertilizer costs along with tariffs on imports. On top of this, the El Niño weather pattern is on track to become the most powerful of the past 76 years — potentially putting even more pressure on prices if severe weather damages harvests and disrupts trade.  

Now, some executives say they have no choice but to reflect these increases in their own prices. 

Increasing prices is “the last lever we have,” Campbell’s Chief Financial Officer Todd Cunfer said this week at the Barclays Global Consumer Staples Conference. Cost-cutting measures couldn’t keep up, he added: “Unfortunately, that was not enough given the extreme amount of inflation that we are seeing right now.” 

On Sept. 11, the Bureau of Labor Statistics reported the consumer price index rose 0.4% in August, adding to concerns that inflation isn’t abating. U.S. diesel prices have also risen above $6 a gallon for the first time ever, which will likely boost food costs.

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Spice and condiment maker McCormick & Co. has said it expects higher prices to bolster results in the second half of 2026. (Donald King/AP/File)

Also on Sept. 11, Kroger Co., one of the biggest U.S. supermarket operators, cut its sales forecast, warning that the volume of items sold has slowed since the start of the year. The company also said it expects inflationary pressures to mount, putting additional strain on shoppers.

Kroger ranks No. 32 on the Transport Topics Top 100 list of the largest private carriers in North America, and No. 3 on the TT grocery list. 

Conagra, which makes Birds Eye frozen vegetables and Marie Callender’s meals, has told retailers it will raise prices on a range of goods effective late September, according to memos viewed by Bloomberg News. 

“The magnitude of sustained increases in input costs, including packaging and ingredients” is significant, Chief Customer Officer Derek De La Mater wrote to retail customers in a recent memo. Absorbing these costs isn’t sustainable, he said, adding that price increases are needed in part to maintain profit margins. 

Prices will rise for some Healthy Choice meals, Banquet bowls, Marie Callender’s pot pies, Blue Bonnet margarine and spreads and Birds Eye vegetables, among other items, according to the memos. 

‘Eating it’

For food companies, “there are effectively no major cost sources where we’ve seen relief,” said Ricky Volpe, a professor of agricultural economics at California Polytechnic State University. Retailers and suppliers have been trying to keep prices in check due to competition, political pressure and consumer frustration, he said, but there are limits to these efforts.

“A lot of major retailers and manufacturers and wholesalers have been eating it a little bit, seeing their margins decrease a little bit and trying to keep prices low — but that can’t last forever,” Volpe said. 

The higher prices won’t hit supermarket shelves immediately or all at once. Retailers ultimately decide how much of cost increases they want to absorb and when, weighing a range of factors including market competition and consumer demand. 

Still, the trend will put pressure on President Donald Trump, who campaigned two years ago on promises to make groceries more affordable after a post-pandemic spike. 

Grocery prices have continued rising since Trump took office, reaching a record-high level in June, Bureau of Labor Statistics data shows. Prices have stabilized more in recent months, though remain elevated, according to the data released on Sept. 11.

While egg prices have declined from record highs last year as the industry recovered from the avian flu, costs for many other staples remain elevated — including beef and veal, coffee, fresh fruits and vegetables and milk. Some low-income families are also experiencing more strain due to a reduction in government food assistance. 

Consumer spending has largely remained resilient, though retailers including Walmart Inc. have said lower-income shoppers are more budget-conscious and looking for bargains. Walmart, Kroger, Costco Wholesale Corp. and other retailers are investing to keep prices low for key products and working with suppliers. But some grocers have also said in recent months that higher inflation is expected as the year progresses. 

Costco ranks No. 53 on the TT private carriers list. Walmart ranks No. 1.

‘Wiggle room’

Households are looking to save cash by opting for cheaper store brands, buying smaller pack sizes and going to different stores where prices are lower. While the year-over-year rise in prices isn’t particularly pronounced, it’s the compounding of years of increases that’s the issue, said Sally Lyons Wyatt, chief adviser of consumer goods and foodservice insights at research firm Circana. 

Prices of packaged foods have been rising at a slightly faster rate than those of overall food and beverage items this year, according to Circana. They’ll continue to get more expensive due to higher costs for transportation, packaging and ingredients, among other factors, she said. Weather and energy costs stemming from the U.S. war with Iran will also weigh on prices. 

“What is the cost that the consumer can bear? It used to be a lot,” she said. But following five years of built-on inflation, “there isn’t a lot more wiggle room.” 

Some companies, such as General Mills Inc., aren’t hiking prices, but they’ve signaled they’re no longer lowering them.

“We don’t think that we need to do more there across the board,” General Mills Chief Operating Officer Dana McNabb said this week at the Barclays conference. The maker of Cheerios and Nature Valley snack bars lowered many base prices recently to make the products more competitive. That move resulted in improved sales, she said, but added the company will always evaluate if there’s an opportunity to raise prices.  

At the same event, Kraft Heinz Chief Financial Officer Andre Maciel hit a similar note. The maker of Oscar Mayer hot dogs and Classico pasta sauce is trying to keep price increases “as minimum as possible.” But “if you see the whole market moving because in some categories there will be significant inflation pressure, we will just go along,” he said. 

The company said in a statement it expects to absorb roughly 80% of inflation this year and has recently reduced prices on some Oscar Mayer deli products.

Clorox Co. which makes Hidden Valley ranch dressing, said this week it’s raising prices on its food, as well as Glad trash bags and some cleaning products.

The maker of cleaning supplies and cat litter will be “very targeted” in its price increases, CEO Linda Rendle said at the Barclays event, because “we feel right now the consumer is stretched.”