FMI: Technology and wellness drive grocery industry strategy

ARLINGTON, Va. – Despite ongoing economic headwinds, food retailers are accelerating investments in technology, health and wellness, and omnichannel capabilities, according to the 2026 Food Retailing Industry Speaks report released Tuesday by FMI – The Food Industry Association.

The report found that retailers and suppliers continue to face pressure from tariffs, inflation and supply chain disruptions, yet are expanding investments in technology and customer-focused initiatives to improve the grocery shopping experience.

“Consumers are increasingly sensitive to both the cost of food and the nutritional needs of their families. Our annual industry research shows a food industry responding to this challenging economic climate by innovating and improving the customer experience, while offering more healthy options to customers,” said Leslie Sarasin, president and CEO of FMI.

Food retailers identified five priorities for success: navigating economic uncertainty, meeting consumer demand for value and health, improving the shopping experience, adopting new technologies, and strengthening business resilience.

The report found that about 90% of food retailers and suppliers said international trade and tariffs negatively affected their businesses in 2025, while 82% of suppliers said inflation and broader economic conditions influenced consumer shopping behavior. Food retail profit margins remained slim at 2.1%, and credit and debit cards accounted for a record 81% of sales.

Retailers continue to emphasize value beyond price. More than three-quarters (76%) used private brands as a competitive differentiator in 2025, and 77% focused on strengthening community connections. Private brands are also increasingly positioned as healthier product options.

Health and wellness remain a key priority, with 76% of food retailers focusing on nutrition and well-being initiatives and 74% emphasizing products with beneficial nutritional attributes. Among suppliers, 76% reported prioritizing health-focused products, and 67% said those efforts were successful.

The report also highlighted continued growth in omnichannel grocery shopping. Eighty percent of food retailers now offer online shopping, up from about half before the COVID-19 pandemic. In 2025, 94% of shoppers bought groceries both online and in stores. Among retailers, 67% provide curbside pickup and 58% offer home delivery.

Technology investments continue to grow as retailers adopt artificial intelligence to improve operations, including assortment planning and loss prevention. Eighty-two percent of food retailers said they are testing in-store technologies to enhance the customer experience. Suppliers are investing even more aggressively, dedicating 3.3% of sales to technology, compared with 1.9% for retailers. More than four in five suppliers (83%) expect to increase technology spending in 2026, and 60% anticipate those investments will improve profitability.

“The investment food retailers and suppliers are making to ensure robust grocery shopping experiences is significant,” said Steve Markenson, FMI’s vice president of research and insights. “Even with tight profit margins, our research finds food retailers and suppliers are investing in improved store space for key departments, customer service excellence, high-quality fresh foods and local products, as well as technology enhancements with a focus on efficient operations and frictionless grocery shopping experiences.”

The report found that retailers and suppliers continue to face pressure from tariffs, inflation and supply chain disruptions, yet are expanding investments in technology and customer-focused initiatives to improve the grocery shopping experience.

“Consumers are increasingly sensitive to both the cost of food and the nutritional needs of their families. Our annual industry research shows a food industry responding to this challenging economic climate by innovating and improving the customer experience, while offering more healthy options to customers,” said Leslie Sarasin, president and CEO of FMI.

Food retailers identified five priorities for success: navigating economic uncertainty, meeting consumer demand for value and health, improving the shopping experience, adopting new technologies, and strengthening business resilience.

The report found that about 90% of food retailers and suppliers said international trade and tariffs negatively affected their businesses in 2025, while 82% of suppliers said inflation and broader economic conditions influenced consumer shopping behavior. Food retail profit margins remained slim at 2.1%, and credit and debit cards accounted for a record 81% of sales.

Retailers continue to emphasize value beyond price. More than three-quarters (76%) used private brands as a competitive differentiator in 2025, while 77% focused on strengthening community connections. Private brands are also increasingly being positioned as healthier product options.

Health and wellness remain a key priority, with 76% of food retailers focusing on nutrition and well-being initiatives and 74% emphasizing products with beneficial nutritional attributes. Among suppliers, 76% reported prioritizing health-focused products, and 67% said those efforts were successful.

The report also highlighted continued growth in omnichannel grocery shopping. Eighty percent of food retailers now offer online shopping, up from about half before the COVID-19 pandemic. In 2025, 94% of shoppers bought groceries both online and in stores. Among retailers, 67% provide curbside pickup and 58% offer home delivery.

Technology investments continue to grow as retailers adopt artificial intelligence to improve operations, including assortment planning and loss prevention. Eighty-two percent of food retailers said they are testing in-store technologies to enhance the customer experience. Suppliers are investing even more aggressively, dedicating 3.3% of sales to technology, compared with 1.9% for retailers. More than four in five suppliers (83%) expect to increase technology spending in 2026, and 60% anticipate those investments will improve profitability.

“The investment food retailers and suppliers are making to ensure robust grocery shopping experiences is significant,” said Steve Markenson, FMI’s vice president of research and insights. “Even with tight profit margins, our research finds food retailers and suppliers are investing in improved store space for key departments, customer service excellence, high-quality fresh foods and local products, as well as technology enhancements with a focus on efficient operations and frictionless grocery shopping experiences.”