What the Latest Economic Indicators Mean for Independent Grocers

As we head into February 2026, the economic picture is best described as steady but cautious. The latest Economic Indicators report from NielsenIQ (December 2025) shows inflation cooling and wages rising, yet shoppers remain careful, value-driven, and highly intentional about how and where they spend. For independent grocers, that mix creates both challenges and opportunities.

Shoppers Are Feeling the Pressure, Even as Inflation Eases

Inflation has settled into the low-to-mid 2% range, with CPI at 2.7% year over year, but consumers aren’t exactly breathing easy. Consumer confidence dropped to 89.1, signaling continued anxiety around household budgets and future uncertainty. As the report notes, shoppers are “cautious and buying mainly for need,” even with easing inflation.

Food inflation remains uneven:

• Food at Home: +2.4% YoY
• Food Away From Home: +4.1% YoY

That gap continues to work in grocery’s favor, reinforcing value messaging and meal-at-home solutions.

What You Can Do Now

• Spotlight meal-at-home value with bundled solutions (dinner kits, family packs, weekly meal deals).
• Reinforce price confidence with clear shelf tags, ad features, and loyalty offers, as shoppers want reassurance.
• Lean into needs-based merchandising (staples, center store, fresh basics) over novelty items.

Spending Is Concentrated, and That Matters

One of the most striking insights: the top 10% of households ($250K+) now drive nearly half of all consumer spending. While this masks broader weakness in the market, it also introduces risk. As the report cautions, “Premiumization targets affluent shoppers but concentrates risk in a small segment — any demand shift creates outsized downside.”

For independents, this reinforces the importance of broad appeal.

What You Can Do Now

• Offer good/better/best options within key categories to serve multiple income levels.
• Avoid over-indexing on premium SKUs at the expense of core items that drive traffic and loyalty.
• Use premium selectively: tie it to special occasions, not everyday shopping.

Employment Looks Stable, But There's Caution Beneath the Surface

Unemployment remains relatively low at 4.4%, but job openings are shrinking. Many companies are in what the report calls a “‘no hire, don’t fire’ holding pattern” due to unpredictable demand and tariff uncertainty.

At the same time, savings rates are up and credit card balances are down year over year, which are clear signs that shoppers are preparing for uncertainty.

What You Can Do Now

• Expect steady traffic but cautious baskets. Plan labor and inventory accordingly.
• Emphasize value without sacrificing quality, especially in fresh departments.
• Train associates to suggest trade-down alternatives rather than losing the sale entirely.

Retail Sales Growth Is Price-Driven, Not Volume-Driven

Retail sales continue to grow, but largely because of higher prices, not more units. Shoppers are buying only what they’ll use, sometimes treating waste reduction as a “badge of honor.”

The report also highlights that 35% of shoppers are on autopilot, while 65% are actively engaged and making decisions.

What You Can Do Now

• Focus promotions and storytelling on the 65% of engaged shoppers — those reading signs, ads, and labels.
• Reduce complexity for autopilot shoppers with easy-to-shop layouts and clear pricing.
• Highlight values shoppers care about: portion control, freshness, and waste reductionv

Private Label Is No Longer a Backup Plan

Private label continues to gain both dollar and unit share, outperforming national brands. The report calls private label “a powerhouse, steadily taking share across categories.”

Shoppers are willing to pay more when they see “real value and strong product experiences,” according to NIQ’s Steve Zurek.

What You Can Do Now

• Treat private label as a brand, not just a price option—tell the story in-store.
• Expand private label in high-trust categories like dairy, frozen, center store, and everyday fresh items.
• Use private label to differentiate your store, not just compete on price.

The consumer hasn’t disappeared; they’ve just become more selective. Shoppers are cautious, intentional, and value-focused, but still loyal to retailers who help them stretch their dollar without sacrificing quality.

Independent grocers are uniquely positioned to win in this environment by staying close to their shoppers, offering flexibility national chains can’t, and leading with value that feels personal, not generic.