9 Grocery Retail Trends in 2024

Mark Jackley | Content Strategist | May 31, 2024

As 2024 unfolds, supermarkets and grocery stores continue to grapple with inflation, supply chain disruptions, and labor issues, while food prices continue to top the list of consumer concerns, particularly among Generation Z and millennials. On a more positive note, while the global pandemic of 2020 and beyond certainly turned the industry upside down, it also accelerated innovations, such as online shopping, home/curbside delivery, and the increased use of chatbots and other forms of AI. Technology advances also are helping grocers automate key parts of their businesses, including inventory management, customer marketing, and in-store checkouts. These changes promise to help reduce grocers’ costs, boost revenues, and improve product availability and the overall customer experience.

Key Takeaways

  • The grocery industry is in flux, dealing with price inflation, supply chain disruptions, and other variables while moving ahead with technologies that make life easier for shoppers and retailers alike.
  • Shoppers are dealing with inflation in different ways. Examples include switching to less-expensive private-label items, buying in bulk, and exploring new channels, such as online outlets, subscription services, and so-called dark stores that operate like warehouses to provide quick, no-frills shopping.
  • AI is helping grocers improve customer service by providing live agents and chatbots alike with actionable information about customers and their preferences more quickly and more accurately than ever, and by helping create more targeted and compelling marketing and promotional copy. Grocers also are using AI to help keep popular products in stock through better demand forecasting and supply chain and inventory management.
  • Grocery retailers are offering more choices in food categories, such as organic produce and meat substitutes, and implementing more sustainable business practices.

9 Grocery Retail Trends in 2024

Consumers are exploring new ways to shop for groceries as they watch their dollars (US food prices were 25% higher at the end of 2023 than in January 2020) and seek the convenience of digital ordering and home delivery. But make no mistake: Shoppers are back in stores, where they’re embracing a new array of smart retail experiences, such as shopping carts that automatically scan items for payment, apps that help shoppers navigate the store and find deals, and electronic shelf labels with information on product sustainability. Grocery retailers are giving shoppers the best of the physical and online worlds, combining an upgraded in-store experience with more ecommerce options. Below are nine major grocery retail trends.

1. Value shopping

Inflation, while lower than in the past few post-pandemic years, remains high and a source of consumer concern. Some 70% of shoppers in February 2024 cited food prices as a top issue (versus 75% a year earlier), according to FMI, The Food Industry Association. Average weekly spending on groceries in the US remains comparatively high, at $154 in December 2023—lower than $165 a year earlier but still significantly higher than, say, 2015, when that number was $101.

Cost has emerged as the top criterion used by customers when deciding whether to try new products when shopping for groceries, according to research by the data science unit of a large US grocer.

To further illustrate the primacy of price in purchasing decisions, consider that Gen Z shoppers, the most recent cohort to have entered the workforce (and thus the most likely to have tight budgets), are more likely (at 78%) than Gen X shoppers (69%) or even baby boomers (72%) to compare unit prices within the same store.

Grocers have responded by offering private-label and other lower-priced alternatives. Sales of private label goods in 2023 represented 19% of total grocery revenue, a 5% jump year over year. Grocery retailers also are looking into new revenue models, such as subscription services—à la meat and fish delivery service ButcherBox—that let customers customize their meat, seafood, or vegetarian orders and even set their own delivery frequencies.

2. Supply Chain Disruptions

Continued supply chain disruptions caused by numerous factors (including crop failures, trucker strikes, and geopolitical upheaval) are forcing grocery retailers to rethink their fulfillment models and product assortments to meet consumer demand. Some are using AI models to help develop alternative suppliers and delivery routes. Grocers will increasingly align their planning decisions with demand forecasting, inventory management, and goods receipt flow (checking items received against purchase orders).

3. Improved In-Store Experience

Now back in stores in force, shoppers are taking advantage of tech-driven improvements. For instance, customers can check out faster using scanners that let them ring up items as they walk through the store, then pay without going through busy checkout areas. Going one better, AI-powered smart carts automatically handle scanning and payment.

Some 25% of consumers now use grocery shopping apps, according to payment systems provider Ingenico. Such apps hold shopping lists, display store maps, offer digital coupons, and integrate with loyalty programs. At some stores, shoppers can preorder deli and bakery items online instead of standing in the queue clutching a paper order number. Digital kiosks promoting the latest deals are popping up as well.

4. Use of AI, machine learning, and automation to streamline operations

Advanced technologies promise to make grocers more efficient in many areas, including customer care, quality control, inventory management, pricing, and fraud detection. One major big box retailer reports using cameras and real-time data to increase shelf-stocking efficiency by 90% and sales in meat aisles by 30%. Increasingly, AI-based data analytics give grocers details on buyers’ meal preferences, food allergies, and motives for purchasing items, enabling them to craft pricing and promotions more precisely. With “dynamic pricing” of grocery items, retailers can use AI algorithms to analyze data on competitors’ prices, on their own stock levels, on pricing history, and from other sources to determine the most profitable prices for items.

AI algorithms built into a variety of systems also help retailers cut food waste, improve their circular ads, and enhance demand forecasting. Grocers also can use AI to identify opportunities that conventional data analytics might miss. For instance, analytics might recommend a lower allocation of fresh produce to a given store because the location performed poorly the previous season, while an AI-based analysis might suggest allocating a greater amount of inventory because it takes supply chain and other external factors affecting that store into account. Grocers can use generative AI to produce more and better-targeted marketing and promotional copy without hiring more staff.

5. Growth opportunities for smaller retailers

Bigger isn’t always better. Small grocery retailers are succeeding with cozier spaces, personal service, and unique offerings. Dom’s Kitchen & Market, which opened in Chicago in 2021, features meal stations at the center of the retail floor, with a selection of packaged goods off to the side.

Larger grocery chains are getting in on the action by spinning off smaller brands. Publix, which operates more than 1,300 supermarkets in the US Southeast, rolled out GreenWise Market, a small-format store mixing organic produce and meats with grocery staples. As foot traffic in 2022 declined in conventional Publix stores, traffic rose steadily at GreenWise stores, where patrons also spent more time shopping. Like Dom’s, some smaller stores are destinations for meals, fresh food, and fun activities. Schnucks, a family-owned chain in the US Midwest, opened Eatwell Market, a natural foods store.

6. Focus on sustainability and healthier options

The environmental, social, and governance (ESG) movement and increasing demand for healthier foods are changing consumers’ grocery lists. Research firm Mintel in 2023 reported that 27% of US shoppers said they were reducing their meat consumption and 17% were lowering their dairy intake. Meantime, grocers are offering more choices of foods that are both ethically sourced and healthier. For instance, Swiss grocery chain Migros is partnering with SuperMeat, a food technology company that grows meat from animal cells. Such cultivated meats lower the amount of methane gas generated by livestock. They also allay consumer concerns about animal cruelty and the health risks posed by growth hormones.

A 2024 survey of US consumers by NielsenIQ shows that 95% want to make sustainable living a greater part of their lives. According to 2023 research by Grocery Doppio, 61% of consumers said they were aware of the sustainability efforts made by their preferred grocers and almost 40% said they were willing to pay a premium for sustainable choices.

7. Increase in online shopping platforms

While consumers still shop for most of their groceries in stores—brick-and-mortar stores account for 83% of US grocery sales—online grocery shopping is gaining serious momentum, outgrowing in-store sales nearly threefold in 2024 compared to 2023, according to NielsenIQ. US grocery delivery sales are expected to exceed $257 billion in 2024 and $422 billion by 2028, according to Statista. Walmart (including Sam’s Club) is the largest US online grocer, with more than 25% of the market. Other large grocery e-tailers include Amazon Fresh, Kroger, Costco, Target, and Albertsons. Smaller online brands Vitacost and Thrive Market specialize in natural foods while Weee! specializes in Asian fare.

Grocers are starting to blend their online and in-store experiences, using what’s often referred to as seamless omnichannel experiences. For example, grocers personalize offers to online shoppers that they can redeem during their next store visit. Some supermarkets let shoppers order specialty products online for pickup in-store, where people often duck inside to make additional purchases. Some apps even make it easier to impulse buy candy and gum, whether people are shopping from home or perusing grocery store shelves.

8. Expanded delivery and subscription models

Oracle research shows that nearly 30% of consumers want grocery delivery options, typically curbside pickup, home delivery, and in-store pickup, when purchasing online. Delivery models are becoming more sophisticated. Walmart and Albertsons now offer coupons, shopping lists, product suggestions, and special offers as part of their delivery services, on top of flexible scheduling and delivery notifications. Besides competing with each other, grocery retailers contend with delivery-first competitors, such as Instacart, Grubhub, Shipt, DoorDash, and Uber Eats.

During the pandemic, consumers warmed to meal kits—subscription services that send partially prepared meals to the home. The global meal-kit market is expected to reach $29.63 billion by 2028, compared with $13.15 billion in 2022, according to Research and Markets. A monthly subscription to ButcherBox, covering shipping, runs $146 to $306, depending on what you buy and the size of your orders. Customers can choose their mix of meat and fish or let ButcherBox curate it for them. The service is popular in areas with little access to grass-fed meat and seafood choices.

Misfits Market ships excess produce, meat, and more from producers that otherwise would throw away the food. Customers order weekly, starting with a selection that Misfits recommends, which shoppers can change to suit their tastes. Misfits advertises savings of up to 30% compared with grocery store prices, along with the satisfaction of helping reduce food waste.

9. Emergence of “dark stores” and micro-fulfillment centers

Dark stores, also called micro-fulfillment centers, are devoted exclusively to online grocery orders. Customers never enter the outlet, instead scheduling home delivery or curbside pickup. Using apps, customers shop for items currently on shelves, and orders are fulfilled within minutes. Speedy, accurate orders are a win for consumers, while these retailers save money on store design and point-of-sale service.

Investors have been eager to get in on the action. For example, US startup Gopuff has raised close to $4 billion and German dark grocer Gorillas has raised $44 million.

Stay Ahead of Grocery Trends and Shopper Needs with Oracle

As the grocery industry evolves, retailers are using Oracle Cloud technology to stay ahead. Oracle Retail grocery solutions help supermarket chains and individual stores forecast demand, precisely manage their inventories, make it easier for shoppers to find and pay for items in-store and online, and improve the overall customer experience. Stores also use Oracle Retail grocery solutions to manage procurement, improve supply chain efficiency and reduce risk, segment and target consumers, and grow their businesses.

The grocery industry sees positive signs, and so do shoppers, who use words such as “hopeful” and “optimistic” when describing their outlook for 2024, according to the same study by FMI cited above. Technology is helping change the game. Grocery retailers are investing in providing hybrid online and in-store shopping experiences as well as using smart technologies that save shoppers time (and sometimes money) as they cruise the aisles. It’s an exciting time to be in one of the world’s essential industries.

Grocery Consumer Expectations FAQs

How is technology changing the way people shop for groceries?

A range of technologies are improving digital and in-store shopping. For example, smart shopping carts automatically scan and ring up items, letting shoppers skip the checkout line.

What are the most popular products in the grocery industry?

The most popular products vary by grocery chain and region, but soda pop, bread, eggs, milk, chips, and breakfast cereal are usually near the top of the list.

What sustainable practices can grocers invest in for 2024?

Grocers can offer more sustainable items, such as meat made from plants or animal cells. Retailers can also give shoppers more environmental, social, and governance information about each product on their shelves and digital channels.

See how Oracle Retail’s grocery solutions deliver a more efficient shopping experience.