Companies within the Zacks Consumer Products – Staples industry are navigating a challenging consumer environment. Rising living costs are straining household budgets, prompting more cautious spending and putting pressure on industry-wide sales. At the same time, many consumer goods companies are contending with higher raw material costs and elevated selling, general and administrative (SG&A) expenses.

Despite these headwinds, demand for essential consumer products remains favorable. Industry leaders, such as The Procter & Gamble Company ((PG Quick QuotePG - Free Report) ), Church & Dwight Co., Inc. ((CHD Quick QuoteCHD - Free Report) ), Ollie's Bargain Outlet Holdings, Inc. ((OLLI Quick QuoteOLLI - Free Report) ) and Grocery Outlet Holding Corp. ((GO Quick QuoteGO - Free Report) ) are leveraging strategies centered on innovation, cost efficiency and digital transformation to sustain growth and maintain market momentum.

About the Industry

The Zacks Consumer Products – Staples industry consists of companies involved in marketing, producing and distributing a wide range of consumer products. These include personal care items, cleaning equipment, stationery, bed and bath products and household goods like kitchen appliances, cutlery and food storage. Some industry participants also provide batteries and lighting products, whereas some offer pet food and treats, pet supplies, pet medications and pet services. Companies in the Consumer Products – Staples universe offer products to supermarkets, drug/grocery stores, department stores, warehouse clubs, mass merchandisers and other retail outlets. Some companies sell products to manufacturers of perfumes and cosmetics, hair and other personal care products. Products are also sold through other distributors and the fast-growing e-commerce channel.

Trends Shaping the Future of the Consumer Products - Staples Industry

Encountering Higher Costs in a Challenging Landscape: The consumer goods industry is facing mounting pressure from escalating costs in raw materials, labor and transportation. These higher input costs are compressing profit margins, particularly when companies are unable to pass them fully onto consumers. Adding to the challenge are rising SG&A expenses and increased investments in digital transformation and marketing to drive growth. Shipping disruptions further exacerbate the situation, causing delays and higher freight expenses that squeeze margins even more. In response, many companies are pursuing restructuring initiatives and cost-cutting measures to enhance operational efficiency and sustain profitability in this demanding environment.

Consumer Spending Volatility: Companies in the consumer products – staples space are experiencing heightened spending volatility amid an uncertain macroeconomic backdrop. Rising living costs and declining personal savings are altering consumer behavior, particularly among lower-income households. These financial pressures are constraining purchasing power and impacting sales across the industry. Given the industry’s reliance on middle and lower-income consumers, it remains especially vulnerable to economic headwinds that could lead to weaker demand, lower sales volumes and slower growth momentum.

Currency Fluctuations: Numerous players in the industry are susceptible to unpredictable currency movements due to their exposure to international markets. The risk arises from the potential impact of a stronger U.S. dollar, which may compel companies to contemplate either raising prices or squeezing profit margins in locations beyond the United States.

Maximizing Revenues Through Strategic Optimization: Players in the consumer products space have been refining their operations to optimize revenue generation, which includes a strong focus on enhancing e-commerce and digital initiatives. They are also innovating to cater to evolving consumer demands, such as prioritizing healthier food options, incorporating eco-friendly packaging and leveraging technology to enhance convenience. These efforts not only fuel growth but also help maintain competitiveness in an ever-changing market. Many industry players are reshaping their portfolios by pursuing strategic acquisitions and divestitures, enabling a sharper focus on high-growth areas.

Zacks Industry Rank Indicates Dull Prospects

The Zacks Consumer Products – Staples industry is housed within the broader Zacks Consumer Staples sector. It currently carries a Zacks Industry Rank #163, which places it in the bottom 33% of more than 245 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates dim near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually becoming less confident about this group’s earnings growth potential. Since the beginning of July 2025, the consensus estimate for the industry’s current financial year earnings has decreased 0.9%.

Let’s look at the industry’s performance and current valuation.

Industry vs. Broader Market

The Zacks Consumer Products – Staples industry has lagged the S&P 500 Index and the broader Zacks Consumer Staples sector over the past six months.

The industry has lost 4.5% over this period compared with the broader sector’s decline of 0.5%. Meanwhile, the S&P 500 Index has advanced 17.5%.

Six-Month Price Performance

Industry's Current Valuation

On the basis of forward 12-month price-to-earnings (P/E), commonly used for valuing consumer staple stocks, the industry is currently trading at 20.07X compared with the S&P 500’s 23.02X and the sector’s 16.96X.

Over the past five years, the industry has traded as high as 23.38X, as low as 18.96X and at the median of 21.18X, as the chart below shows.

Price-to-Earnings Ratio (Past Five Years)

4 Consumer Product Stocks to Keep a Close Eye On

Ollie’s Bargain: This Zacks Rank #2 (Buy) company excels in offering a wide range of brand-name products across multiple categories at significantly reduced prices. Its “buy cheap, sell cheap” model, cost discipline, and flexible store format support profitable expansion across diverse geographies. Accelerated unit growth, aided by retail bankruptcies and closures, is expanding its footprint while maintaining strong returns. Ollie’s Army loyalty program, representing most of the sales, deepens engagement and drives customer frequency. Backed by an efficient supply chain and steady deal flow, the company is well-positioned to capture share and reinforce value leadership. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Ollie’s Bargain’s current fiscal year EPS has remained unchanged at $3.79 in the past seven days. This indicates growth of 15.6% year over year. OLLI has seen its shares soar 26.8% in the past six months.

Price and Consensus: OLLI

Grocery Outlet: This Zacks Rank #2 company is strengthening its foundation through four priorities: improving new store performance, securing top talent, closing execution gaps, and scaling effectively. The company is rebalancing toward infill markets, enhancing site selection, and piloting merchandising and fresh category tools. System upgrades, supply chain efficiencies, and private-label innovation support both value and margin. With disciplined, return-focused expansion, Grocery Outlet is positioned to restore comps, expand margins and deliver stronger returns on invested capital in fiscal 2025 and beyond.

The Zacks Consensus Estimate for Grocery Outlet’s current fiscal-year earnings per share (EPS) has increased by a penny to 78 cents over the past 7 days. The projection indicates a growth of 1.3% from the year-ago period’s figure. GO’s shares have gained 43.2% in the past six months.

Price and Consensus: GO

Procter & Gamble: It is a leading provider of everyday consumer products and carries a Zacks Rank #3 (Hold). The company emphasizes irresistible superiority across product, packaging, communication, retail execution, and value to expand categories and delight consumers. Productivity initiatives free resources to invest in innovation and shareholder returns, while constructive disruption ensures adaptability to evolving markets. A leaner, empowered organization enables faster decision-making, reinforcing Procter & Gamble’s ability to deliver sustainable growth, market leadership, and long-term value creation.

The Zacks Consensus Estimate for Procter & Gamble’s current fiscal-year EPS has remained unchanged at $6.99 in the past seven days. This suggests growth of 2.3% from the year-ago period. PG shares have declined 6.5% in the past six months.

Price and Consensus: PG

Church & Dwight: Church & Dwight, the leading U.S. producer of sodium bicarbonate, popularly known as baking soda, is focused on strengthening its business through innovation, portfolio optimization and digital expansion. The company carries a Zacks Rank #3 at present, reflecting a balanced outlook amid ongoing strategic initiatives. The company emphasizes growth across its power brands, supported by continuous product innovation, marketing investments, and international expansion. Efficiency initiatives and disciplined cost management help fund brand building while enhancing margins. With a balanced approach to acquisitions and e-commerce growth, Church & Dwight aims to broaden consumer reach, drive category leadership, and deliver sustainable long-term value to shareholders.

The Zacks Consensus Estimate for Church & Dwight’s current fiscal-year EPS has remained unchanged at $3.47 in the past seven days. The projection indicates growth of 0.9% from the year-ago period’s figure. CHD’s shares have declined 14.7% in the past six months.

Price and Consensus: CHD