Campbell's posts bumper sales amid economic uncertainty
Shoppers are buying more soup. That might be a bad sign for the economy. Campbell's — the company behind its namesake soups, as well as brands like Pepperidge Farm and V8 juices — just posted a profit of $66 million.
The food maker's CEO, Mick Beekhuizen, said customers have been snapping up low-cost meal soups from grocery stores. The company reported 15 percent sales growth in its meals and beverages division. 'Consumers are cooking at home at the highest levels since early 2020,' he said while reporting the company's earnings.
Still, Campbell's noted that customers have been pulling back on snack purchases as shoppers cut discretionary spending. It saw an 8 percent sales decline for its snack brands. Executives reiterated their full-year forecast, saying they expect sales to grow by around 6 percent by the end of 2025. That's down from the company's previous projection of 9 to 11 percent growth.
The company's meal growth and snack decline reflect how many Americans are responding to slumping consumer sentiment reports and higher costs in grocery stores. American shoppers are worried about inflation . Monthly inflation rates have cooled to just above the Federal Reserve's target of 2 percent, after peaking at over 9 percent in 2022.
But elevated food prices haven't come down: many of those increases are now baked into the cost of everyday goods. Now, shoppers are contending with President Donald Trump's tariffs, which threaten to push food prices even higher.
Dozens of food providers — including mid-tier restaurant chains, grocery stores, and budget brands — say their customers are spending less and opting for cheaper options. Casual dining restaurants have been hit particularly hard.
These establishments, which rely on discretionary spending from middle-income Americans, are reporting slower traffic and reduced spending. At the same time, they're facing rising costs for the ingredients they use. Bloomin' Brands, the owner of Outback Steakhouse, posted an 8.3 percent sales decline in April. McDonald's also posted a 3.6 percent sales decline .
The toxic mix of slowing sales and higher costs has spelled doom for hundreds of restaurant locations and some of America's most recognizable brands. In the past year and change, several iconic brands have filed for bankruptcy, including TGI Fridays, Red Lobster, Hooters, Bertucci's, and On The Border.
The wave of closures highlights a broader reality: more Americans are trading nights out for meals at home — and not by choice. That belt-tightening is being echoed by low-cost retailers like Dollar General, which cater to budget-conscious consumers. Executives there are also seeing signs that financial stress is reshaping how people shop.
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