Consumer Staples: The Only U.S. Equity Sector with Negative Returns in 2025

This analysis is based on the Finbold report [1] published on December 30, 2025, which identifies the Consumer Staples sector as the only U.S. equity sector to deliver negative returns in 2025, amid broad-based gains across other sectors. Internal market data [0] shows that major components of the sector—Procter & Gamble (PG, -13.99%), PepsiCo (PEP, -5.65%), and Kraft Heinz (KHC, -21.65%)—contributed significantly to the sector’s poor performance.

Sector-wide headwinds, combined with company-specific challenges, drove the decline. PepsiCo faced supply chain cost increases, subdued consumer conditions, weak economic data, and declining sales volumes, leading to a cut in its 2025 outlook [4]. Procter & Gamble’s underperformance reflects broader market perceptions of its ability to navigate competitive pressures and evolving consumer trends [3]. Kraft Heinz also encountered profit pressures, as highlighted in its Q3 2025 earnings call [2]. These company-level issues were compounded by sector-wide factors including changing consumer behaviors, heightened competition, and margin compression from cost inflation.

1. Defensive sectors like Consumer Staples are not immune to macroeconomic pressures (e.g., supply chain costs, consumer sentiment) and structural shifts (e.g., changing spending priorities), which can override their traditional stability.
2. The significant underperformance of household brands (PG, PEP, KHC) suggests a potential reevaluation of consumer loyalty and demand for conventional staple products.
3. The stark contrast between the Consumer Staples sector’s negative returns and broad gains in other sectors underscores the sector’s unique challenges in 2025, distinguishing it from more resilient or growth-oriented sectors.

• Risks
  : Continued consumer trend shifts away from traditional staple products, potential for further supply chain disruptions or cost increases, and persistent weak consumer sentiment could prolong the sector’s underperformance. Company-specific risks, such as failure to innovate or adapt to market changes, may also impact individual stocks within the sector.
• Opportunities
  : Valuation adjustments resulting from the sector’s decline could present long-term investment opportunities for investors focused on stable, dividend-paying stocks. Companies that successfully innovate to align with changing consumer preferences (e.g., healthier products, sustainable packaging) may improve their performance and market position.

The Consumer Staples sector is the only U.S. equity sector with negative returns in 2025, primarily due to poor performance from major component stocks PG, PEP, and KHC. The decline is driven by a combination of sector-wide headwinds (consumer trend shifts, competition, cost pressures) and company-specific challenges (supply chain issues, outlook cuts, earnings pressures). This analysis provides contextual information about the sector’s performance and driving factors, without offering specific investment recommendations.