ING: Food inflation eases in 2026

Consumers remain concerned about their grocery bills. Still, new projections point to easing price pressure in 2026. This offers food companies and retailers some cautious relief, although demand remains fragile.

Inflation declines, prices keep rising

Since 2022, EU consumers have faced exceptional price increases at the supermarket. This weighed heavily on real wages. Wage growth has since begun to recover and is expected to continue improving in 2026.

According to ECB projections, food inflation will fall from 2.8% in 2025 to 2.4% in 2026. Lower market prices for sugar, dairy, and cocoa are contributing to this slowdown. Lower energy prices are also helping to contain costs across the supply chain.

At the same time, labor costs remain a structural factor. In the food industry, labor typically accounts for 10 to 15% of total costs. Groceries will therefore still become more expensive in 2026, but at a slower pace. Some staple products, including milk, butter, sugar, and potatoes, are showing price declines. The recent price trend for fruit and vegetables is also favorable, although weather conditions remain decisive.

Significant differences across Europe

Inflation disparities within the EU remain substantial. In France, Germany, and Italy, food inflation in the fourth quarter of 2025 ranged between +1.5% and +2.3%. In Romania, Bulgaria, and the Baltic states, it ranged from +5.0% to +7.5%. In Romania, a VAT increase introduced in August 2025 is contributing to higher figures.

On average, Europeans spend nearly 16% of their total household budget on food and non-alcoholic beverages at retail. This share is higher in Eastern and Southern Europe. As a result, households in Romania and Bulgaria are relatively more affected.

Demand remains under pressure

The ING Consumer Survey shows that many consumers expect faster price increases in 2026. In Romania, 73% anticipate this, compared with 66% in Belgium and 64% in the Netherlands. Only 14% of respondents across the six surveyed countries expect inflation to moderate.

According to EU industry surveys, lack of demand is the primary concern for producers, particularly in France, the Netherlands, and Belgium. Across the EU, retail volumes have improved only modestly since mid-2024. In the Netherlands, discount supermarkets gained market share in 2025, signaling continued price sensitivity among consumers. The economic outlook is improving, but strong volume growth is unlikely.

Ing.com