Goldman Says Food Companies Struck An “Overall Cautious Tone” On The Consumer

The latest read on the American consumer comes from Goldman analysts led by Leah Jordan, who compiled the most important commentary from food companies on consumer behavior trends in the fourth quarter. It’s worth noting, however, that this snapshot predates the energy shock triggered by the U.S.-Iran conflict.

Jordan’s food and retail stock coverage includes 15 companies: Albertsons Companies, Conagra Brands, Cal-Maine Foods, General Mills, Grocery Outlet, Hormel Foods, Hershey, Kraft Heinz, Kroger, Mondelez International, Once Upon a Farm, Pilgrim’s Pride, Sprouts Farmers Market, Tyson Foods, and United Natural Foods.

On fourth quarter earnings results, the analyst said, “Overall, we continue to favor grocers that should benefit from ongoing consumption shifts toward fresh and private label, along with support from scale as the balance of power shifts toward retailers, highlighting Buy-rated ACI, KR, and SFM.”

She added, “While some headwinds persist for certain areas of packaged food, our Buy ratings for HSY (on CL), MDLZ, OFRM, HRL, SFD, and TSN are underpinned by solid top-line growth given category/region exposure, along with idiosyncratic and self-help margin drivers.”

The analyst then summarized what each company and retailer was saying about the consumer. The biggest takeaway is that the K-shaped economy remains an uncomfortable reality for the Trump administration. Jordan noted that the companies in her coverage struck an “overall cautious tone” regarding the consumer.

She continued:

We observed a continuation of cautious commentary around the consumer in 4Q, noting the majority of food retailers and manufacturers highlighted declining consumer sentiment along with an increased focus on affordability, especially for lower- and middle-income cohorts. Specifically, companies highlighted increased consumer engagement with items on promotion, smaller baskets, channel shifts toward club/value, and strong demand for value sizes (multi-packs/smaller packs) and private label. Overall, we continue to see a bifurcation across food, with strength in opening price points as well as premium and differentiated products (e.g., value-added, higher-quality ingredients, innovation). Regarding SNAP, most companies indicated temporary pressure from the pause to benefits during the government shutdown in the quarter, while we expect it to be a slight headwind in 2026 given ongoing reductions in the program. We note the greatest SNAP exposure for GO among the grocers (Exhibit 6) and CAG among packaged food (Exhibit 7). Amid this consumer backdrop, we observed incremental price investments by food retailers in the quarter, along with a step-up in brand investments by packaged food companies, with most seeing improvements in promotional lifts recently (Exhibit 8). We expect the long-term trend for private-label adoption to continue given its value proposition, while quality has improved and the stigma has waned, which should be a tailwind for food retailers and a headwind for packaged food companies.

Consumer pressure noted by food companies

It is no secret that the K-shaped economy has been a major challenge for the Trump administration. Notably, the comments above from food companies were made before the energy shock of the past two weeks triggered by the U.S.-Iran conflict. The administration has insisted that the conflict will be short-lived and that any rise in energy prices will be temporary.

However, if the conflict persists and Brent and WTI futures remain above $100/bbl, higher pump prices could weigh on consumer sentiment and negatively affect consumer behavior on the retail side of the economy.

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Professional subscribers can read much more from Goldman’s “Americas Food: Key themes from 4Q results” on our Marketdesk.ai portal