Will the 2025 Recession Hit Grocery Brands Hard? Here’s the Truth.

Unfortunately, some people are predicting a Recession, and it has a lot of brand owners nervous. 

And the fear of the unknown is the hardest part.  

But what if you could predict exactly what it’s going to look like?  

Well, if the past is any indication, you can.  

Let’s talk about T𝗵𝗲 𝗚𝗿𝗲𝗮𝘁 𝗥𝗲𝗰𝗲𝘀𝘀𝗶𝗼𝗻 𝗼𝗳 𝟮𝟬𝟬𝟴.

Now if you’re younger than maybe 40…

…you might not have a clear picture of that era.

The burst of a subprime mortgage bubble.

The Lehman Brothers bankruptcy.

A 53% market collapse in 3 months. 

And the worst economic crisis in 80 years.

So what happened to Food, Beverage, and Grocery Adjacent Categories like Pet - during the Great Recession? 

After all, this might be the best case study we have.

But if you’re going to look at 2008, brace yourself. 

Now you want to know what happened to Grocery Spending in 2008 and 2009?

Nothing. 

At all. 

According to official USDA data.

Now Total Food did drop a little. 

But that is because Away From Home Eatingdid dip a little from 40.5% to 36.5% of total food spending. 

So then, everyone started to shop at Aldi, correct?

Nope. 

Aldi did well in 2008, as did Dollar General and some other discount retailers.

But so did Kroger and Target and Sprouts.

Sprouts for Heavens sake. 

That is because Grocery dusts the S&P 500 during hard times.

Because people continue to spend there.

They do spend a little less on entertainment, a little less on luxuries, a little more at home.

Yes, the tariffs might present a new dimension this time around.  I get it.

Yes, 𝘪𝘧 there is a Recession - and that is a big ‘IF’ -  it might be unique to 2008.

But regardless, Grocery is the 𝘣𝘦𝘴𝘵 possible place to be during recession.

Here are some tips for digital commerce:

Some of our biggest brands are leaning hard into channels like Amazon.  

There is just a lot more flexibility in pricing than you have in Retail.

Here’s are four tips for your e-commerce:

1.  Rework your unit economics as soon as costs change. 

(Your agency should do this with you.  If they don’t, or if they can’t, you need a new one.)

2.  If you need to raise prices, just close your eyes and do it.

(If you’re paying tariffs, so are your competitors.)

3.  Renegotiate with suppliers ASAP, citing tariffs.  Suppliers and Service Providers don’t want to lose business any more than you do. 

(If tariffs go away, even better. Hopefully you have better prices.)

4.  If you have discretionary capital, press hard on Amazon advertising.

(This is one of a few channels where you have some control, especially over pricing.)

𝗧𝗵𝗲 𝗡𝗲𝘁 𝗡𝗲𝘁.

No one knows exactly what will happen.

𝘉𝘶𝘵 𝘺𝘰𝘶𝘳 𝘤𝘰𝘮𝘱𝘦𝘵𝘪𝘵𝘰𝘳𝘴 𝘰𝘱𝘦𝘳𝘢𝘵𝘦 𝘪𝘯 𝘵𝘩𝘦 𝘴𝘢𝘮𝘦 𝘮𝘢𝘤𝘳𝘰𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘤 𝘦𝘯𝘷𝘪𝘳𝘰𝘯𝘮𝘦𝘯𝘵. 

Out-negotiate, out-think, and out-business them. 

Just like you were doing last month. 

Panic causes us to do a lot of dumb things. 

But on the other hand, change brings opportunity. 

Whatever happens, look for those opportunities. 

Move faster. 

Alright guys.  Hang in there, and avoid the hysteria.  That never leads to anything good.  

Need help driving digital growth in uncertain times?

Email us at: Growth@EliteCommerceGroup.com

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We drive velocity in Sprouts, Whole Foods, Walmart, Target, Walgreens, CVS, Kroger, Sam's, COSTCO, and lots of other retailers.

We grow brands on Amazon.