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Newsweek
3 days ago
- Health
- Newsweek
Ozempic Is Costing Grocery Stores Billions
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. GLP-1 medications, including Ozempic and Mounjaro, are already costing grocery stores billions. According to a new report from Big Chalk Analytics, GLP-1 users have cut $6.5 billion from U.S. grocery spending, and the popularity of the weight loss and diabetes medications appears to only be growing. Why It Matters The use of weight-loss medications called glucagon-like peptide-1 (GLP-1) receptor agonists has skyrocketed in recent years. Popular products include Ozempic, Mounjaro, Wegovy and Zepound and have been key treatments for many Americans who are obese or have type 2 diabetes. While the full health effects of these drugs in the long term has not been studied, their prevalence has shown the potential to disrupt industries by lowering grocery and even restaurant profits in the long term. People shop at a grocery store in Brooklyn on May 13, 2025 in New York City. People shop at a grocery store in Brooklyn on May 13, 2025 in New York To Know While GLP-1 medications are already reportedly costing grocers $6.5 billion, the impact could be even costlier in the years to come as 8.3 percent of Americans are planning to start the medications, according to the new Big Chalk survey of more than 4,500 consumers. If this happens, the survey projects losses as much as an additional $4.4 to $10.8 billion. "The changes being seen in grocery stores are the result of people making better choices about food –less ultra-processed food and possibly less food overall," David Navazio, CEO of health care product company Gentell, told Newsweek. Several types of products have seen their purchase rates go down, from cereal and soft drinks to lunch meats. Currently, an estimated 11.2 percent of U.S. adults are on GLP-1 medications, but roughly 20 percent could soon be on the medication in just 12 months. "It's one of the fascinating business 'side effects' of medications like Ozempic that grocery stores are seeing a dip in business," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. "The idea is these medications suppress hunger, which is causing consumers to purchase food less. And while there is certainly some truth to this, it's too soon to call it a long-term trend. Financially, it can be seen as a good thing for money-strapped customers who can reduce their grocery bills along with their waistlines. Whether or not this economic impact is a lasting one remains to be seen." So far, the medications have triggered grocery volume losses of 1.2 to 2.9 percent, with dollar sales dropping between 0.9 and 2.3 percent, depending on the category, according to the report. GLP-1 users were 65 percent more likely to buy smaller packs of cereal and 48 percent more likely to purchase smaller packs of lunch meats. This extended to soft drinks as well, with those on the medication 36 percent more likely to opt for the smaller sizes. "The opportunity for grocery brands is twofold: A continued migration toward better-for-you products—plus an emphasis on smaller pack sizes—are ways CPG brands can adapt to these changing consumer demands for volume," Rick Miller, partner and marketing effectiveness practice lead at Big Chalk, told Newsweek. What People Are Saying Rick Miller, partner and marketing effectiveness practice lead at Big Chalk, said in a statement: "GLP-1s have crossed the household-penetration threshold where their impact on grocery volumes and dollar sales can no longer be ignored. We're past anecdotes. This is measurable, structural change. Brands and retailers must rethink assortment, pricing, and promotion for a shopper who is literally consuming less." David Navazio, CEO of health care product company Gentell, told Newsweek: "We will see changes in product selection as a result of the changes in people's buying habits, with an emphasis on whole foods, produce, lean meats." For grocery stores, it may take time to adapt. But the change is undoubtedly good for the country as a whole that our population is becoming healthier." Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Like anything else, this comes down to supply and demand. If grocery stores are seeing a drop in volume, the next step would usually be lower prices. That's not what we're seeing. Grocery prices were up another 0.3 percent in June, according to the latest CPI data. So if grocers are losing, I'm not quite sure who's winning yet." Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek: "At any given point in time, there is one part of the economy that is booming at the expense of another. This is just the normal oscillation around economic equilibrium. In very general terms, being less obese is healthier, and I think it is a good thing overall to having a healthier population. Grocery stores will slowly adapt to new eating and shopping habits, which will have knockoff effects in other sectors, while some parts of the economy will see increased spending that can be attributed to GLP-1 use." What Happens Next Beyond the economic impacts, the long-term implications of GLP-1 medications on health are still being studied. A recent study discovered a new link between taking GLP-1 drugs and elevated risk of pancreatitis and kidney conditions, including kidney stones. GLP-1 medications are also tied to a higher risk of digestive problems, including nausea, vomiting, diarrhea, and even stomach paralysis in rare cases. For the business economics of grocers reacting to the uptick in GLP-1 usage, prices have not adequately shifted yet, Thompson said. "America has an obesity problem. If these drugs are helping people eat less and live healthier lives, that's a net positive," Thompson said. "But in a capitalist economy—if Adam Smith's invisible hand is really at work—we should be seeing food prices and health care costs fall also. That's not happening. Health care continues to rise at an alarming rate, and food prices are still climbing. Long term, we might expect some price relief, but we're not there yet."
Irish Examiner
07-07-2025
- Health
- Irish Examiner
Catherine Conlon: Drop in US junk food sales the break we need to cut unhealthy diets
Our food system is killing us. Designed to produce cheap calories after the second world war, it is now the cause of one in four adult deaths globally – more than 12 million a year that are due to poor diets. As always, it is the poorest and most marginalised who are most likely to be sicker and die sooner. But a slowdown in sales of snack foods in the US is an opportunity to accelerate a growing momentum away from unhealthy foods that have precipitated a global obesity crisis and an epidemic of chronic disease including type 2 diabetes, cardiovascular disease and cancer. The introduction of a junk food tax that is used to subsidise the cost of healthier food options like fruit and vegetables, fresh meat, fish and wholegrains has the potential to accelerate this momentum. It could also be used to support producers of whole foods. The combination of supports would have the potential to transform the food market and make life easier and better for everyone. A report in the Financial Times confirms that America's appetite for snacks is turning sour. Biscuits, chocolate bars and crisps are being left on the shelves as US consumers tighten their purse strings, according to grocery scanner tracker Circana. The shift away from junk food has been underpinned by the arrival of GLP-1 weight-loss drugs. The sale of sweet treats has fallen by 6.1% and salty snacks by 1.2% in the US in the last year, according to checkout data collected by NielsenIQ. The shift has also been underpinned by the arrival of GLP-1 weight-loss drugs, such as Ozempic as well as increasing concern about the health risks of eating ultra-processed foods. US Consumer goods industry consultancy, Big Chalk Analytics, estimate that GLP-1 medications has already caused US grocery losses of between 1.2 and 2.9%. Nik Modi, a consumer goods analyst at RBC Capital Markets, told the Financial Times that he believed "a big chunk" of the sales decline was down to "the economy". The snacks being hardest hit are reported to be those that are laden with salt and sugar while healthier alternatives like nutrition bars and yogurts are growing, according to market research firm Spins. US consumer staples analyst at Bank of America, Peter Galbo suggested that with budgets under pressure consumers were tending to either spend more for a snack they see as healthier or trade down to a value brand. Governments can use taxation, laws on marketing, labelling, advertising and ingredients and other policies to shift the food environment. They can provide social and economic safety nets for low-income communities. Yet the rate of progress in implementing these policy levers is excruciatingly slow because policy makers do not feel they have the public mandate to introduce the steps that are needed. And because the food industry will baulk at anything that impacts on shareholder profit. Research from Northeastern University's Network Science Institute indicates that almost three quarters (73%) of the US food supply is ultra-processed, as is around 60% of the average American's diet. The study defined ultra-processed according to the NOVA food classification system. These foods are hyper-palatable 'industrial formulations' that stray from their organic origins. Most processed foods are derived from substances such as oils, fats, sugar, starch or are synthesised from flavour enhancers, colours, and other additives. While not yet in quite the same league as the US, in Ireland almost half (45.9%) of household purchases come from ultra-processed food resulting in one of the unhealthiest food systems in Europe. Only the UK (50.7%) and Germany (46.2%) are higher with countries at the lower end including Portugal (10.2%), Italy (13.4%) and Greece (13.7%), according to data published in Public Health Nutrition (2018). Yet we somehow accept this as normal. A recent UK report found that a basket of healthy food costs more than double that of less healthy options. The Food Foundation found that 1,000 calories of healthy food such as fruit and veg costs £8.80 compared to £4.30 for the equivalent amount of less healthy food, such as ready meals and processed meats. The charity warned that low-income families are being priced out of being able to afford to eat healthily. What would really make a difference is for governments to disincentivise unhealthy foods while using subsidies and pricing to incentivise healthier food purchases for all, especially low income households and families. A junk food tax to subsidise healthy options Subsidies for healthy food - including fruit and vegetables but also meat, fish, and wholegrains - would mean that consumers pay less for whole foods instead of calorie dense foods that have had all the healthy fibre and nutrients removed to prolong shelf life and filled with saturated fat, sugar, salt and additives to give the food the 'bliss' factor that consumers crave. We have seen this work with the sugary drinks tax, introduced in Ireland and the UK in 2018, resulting in a precipitous drop in the consumption of drinks that fell into the tax band. It was followed by a rapid response from the industry in reformulating drinks products to ensure that sugar levels fell below levels that would fall into the tax band. In 2023, Colombia did just that with the implementation of a tax on ultra-processed foods – one of the first countries to take such a measure to tackle obesity, diabetes and other lifestyle diseases. The tax is being implemented gradually beginning at 10%, before rising to 15% in 2024 and 20% in 2025 – specifically targeting foods that are high in salt and saturated fat, as well as industrially manufactured pre-packaged foods. Foods to fall under the 'junk food law' include sausages, ham, ketchup, tinned foods, sweets, jam, fried goods, biscuits, cakes, cereals, pizza, breaded meat and energy bars. Imagine if consumers on a budget passed along the aisle and sought cheaper whole foods like fresh meat, fish, eggs, wholegrains, fruit and vegetables. A junk food tax could also be directed towards producers to subsidise the production of healthy food locally, allowing producers to make a living from growing foods that would be used to supply local retailers, markets and school programmes, as well as other public institutions that provide food like hospitals, nursing homes, prisons and public services. This is not rocket science. It involves much more than platitudes and empty words. It would involve a commitment by policy makers to address rising levels of food poverty, obesity, and chronic disease across our society that is caused by a lack of access and affordability to one of the most basic of human needs – healthy whole foods. Dr Catherine Conlon is a public health doctor in Cork and former director of human health and nutrition, safefood
