Are Legacy Grocery Stores Slipping Away

 

When a high-credibility food industry study signals erosion in consumer loyalty to traditional supermarkets, we shouldn’t merely nod and move on — we should dig deeper. As Steven Johnson, Grocerant Guru®, often warns: what you see is often just the tip of the iceberg; what you don’t see is frequently worse.

The Traditional Grocery Stronghold Is Weakening

Supermarkets still dominate as a base for fresh produce shopping — but that dominance is under strain, especially with younger cohorts. The FMI “Power of Produce 2025” report reinforces this: while 94% of produce buyers use social media, 36% said they discover new fruits or vegetables via digital platforms. Meanwhile, produce sales reached a record $92.3 billion in 2024.

But the antennae of younger consumers are pointed elsewhere. According to Grocery Dive, “a third of produce shoppers recently surveyed said they discover new fruits and vegetables on social media” — meaning digital-first discovery is reshaping in-store behavior.

In short: the conversion path is migrating. Consumers are less bound to entrenched store loyalty, and more influenced by omnichannel, convenience, and “fresh-on-the-run” formats.

Consumer Migration: Where Are They Going?

Johnson has long argued that the “grocerant niche” — hybrid grocery + restaurant models — is where much of the migration is headed. And the market is validating that view. Consider these data points:

·       62% of consumers now purchase prepared meals from grocery or convenience stores at least once a week (Technomic, 2025).

·       Retail fresh food sales in U.S. reached $58.7 billion in 2024, up ~14% year-over-year.

·       Convenience stores boosted foodservice revenues by ~19% in 2024, led by fresh breakfast and lunch options.

·       Traditional restaurant traffic is growing more slowly (~2.3%), indicating that some meal occasions are shifting to retail formats.

These shifts are consistent with Johnson’s long-standing thesis: the battleground is no longer “retail vs. restaurant” — it’s “who owns the next meal occasion?”

Other nontraditional outlets are also snatching share. Dollar stores, niche convenience grocers, and even feed-the-moment counters in non-grocery formats are encroaching on quiet meal dollars.

One more clue in the data: short trip missions are rising — especially under-10-minute shopping excursions — which tend to favor fresh, grab-&-go formats over full-store stock-up trips.

What's Needed to Build

Share of Stomach

Fresh Produce: Still Vital, But Reimagined

The “Power of Produce” report and associated industry commentary offer powerful insights into how the role of fresh is evolving:

·       Although consumers often plan certain produce purchases, 85% still make impulse produce buys in a shopping trip.

·       Quality, appearance, and ripeness are major influencers: 57% of fruit purchases are driven by what “looks good.”

·       Produce is increasingly crossing into every daypart—snacks, desserts, and nighttime munchies are growth occasions.

·       Seasonal and local assortments offer leverage to convert impulse buyers by signaling freshness, origin, and exclusivity.

·       Innovation at the edge is accelerating: single-serve snack packs, avocado toast kits, fresh-cut salads with dressings, and even vegetable “snackables” are gaining traction.

·       In the produce universe, berries, grapes, and avocados led dollar sales growth in recent periods.

By contrast, older supermarket habits — e.g. seasonal flat displays and low SKU turnover — will increasingly fail to excite or retain attention.

Why the Legacy Store Is Losing Ground

Here’s a sharpened list of structural forces pushing decline, with current industry context:

1.       Channel fragmentation & omnishopping
Consumers no longer confine themselves to one “primary store.” A high-payoff deal here, a fresh snack there, a delivery there — shopping is fragmented by design.
NielsenIQ finds that 50% of global respondents report buying more private label products than ever before.
In U.S. grocery, loyalty has frayed: only ~55% of consumers strongly stick to a primary grocery store.

2.       Inflation & value skepticism
Price consciousness is baked in. Many shoppers are migrating to value formats or trading down on discretionary items — making it harder for traditional grocers to justify margin-rich fresh or grocerant experiments without strategic clarity.

3.       Digital influences & social media discovery
Younger consumers often see produce ideas on TikTok, Instagram, or YouTube — then expect in-store execution.
94% of produce shoppers use social media; 36% discover new produce via those platforms.

4.       Rising cost of maintaining legacy density
Shrink, labor, aging infrastructure — the overheads of big-box, high-SKU supermarkets remain steep. Especially when many trips are shifting to fresh, small-format, low-frills missions.

5.       Blurring of boundaries
Traditional grocers are no longer just “grocers.” Walmart, Costco, Walgreens, and others are investing heavily in fresh, ready-to-eat, and heat-n-eat formats. The competitive set is broader than ever.

Trends to Watch

·       Grocerant niche growth: Expect a further acceleration of hybrid grocer/restaurant models — kitchens in backrooms, meal kits combined with produce, “pop-up chef corners” inside grocers, and more “retail + dine” mashups. On this, Johnson has been ahead of the curve.

·       Micro-formats, micro-fulfillment, ghost kitchens: Small foot-print formats near dense neighborhoods, with dark kitchens or micro-fulfillment hubs to support ultra-fresh, fast delivery or pick-up.

·       Tech-driven freshness and supply optimization: AI/demand forecasting, dynamic pricing, real-time shelf-life management, and waste-minimizing replenishment systems will differentiate high-performers. For perishable SKUs, models that combine attention-enhanced LSTM and optimization algorithms are being developed.

·       Hyperlocal & transparency storytelling: Consumers increasingly demand provenance, sustainability, and ethical attributes. Retailers that surface origin stories, regenerative agriculture attributes, carbon footprints, or animal welfare signals (with credibly sourced data) will win trust.

·       “Occasion expansion” in produce: The biggest gains will come from pushing produce into nontraditional dayparts — dessert, nighttime snacks, beverage infusion, salads as sides in prepared meals.

·       Personalization & digital nudges: In-store plus app-level targeting, content (recipes, videos), push notifications, and social commerce tie-ins will deepen engagement and guide impulse buys.

·       Subscription & D2C produce as a traffic driver: Some grocers will experiment with farm-to-door or curated produce boxes to acquire consumer relationships outside the store trip.

Action Imperatives for Grocery Chains & Legacy Stores

1.       Strategically embed grocerant elements
Don’t bolt on a hot bar or meal kit section as an afterthought — integrate menu, SKU flow, staffing, procurement, marketing, and positioning so it becomes a natural extension of your model.

2.       Reimagine the fresh perimeter as a strategic growth engine
Turn produce, deli, ready-to-eat, and meal-assembly into destination zones, not loss-leaders. Use product innovation (e.g. fresh-cut, snackable formats, value-add bundles) to boost basket size and share-of-stomach.

3.       Invest in digital-metallic presence
Sync online, social, and in-store experiences. Use shoppable recipes on social media, live promotions (e.g. “this week’s berry special”), and digital-to-instore triggers (e-coupons, QR recipes).

4.       Optimize assortment around mission-based missions
Understand short-trip missions: what do people shop on their way home from work, near transit nodes, or during lunch windows? Tailor formats, SKUs, pack sizes, and price architecture accordingly.

5.       Leverage loyalty, data, and AI
Use behavioral segmentation, predictive analytics, and dynamic offers to personalize incentives — e.g. push a grab-n-go salad coupon to a midday commuter via the app.

6.       Embrace partnerships and co-creation
Partner with local producers, chefs, or ghost kitchens to pilot new formats. Use limited-edition SKUs, chef drop-ins, or guest menu launches to test what sticks without full-scale rollouts.

7.       Aggressively track and close performance loops
Measure trip uplift, incremental margin, and consumer retention from your grocerant experiments — and refine or kill underperforming pilots early.

Think About This: Legacy supermarkets are being outflanked, not by one competitor, but by converging pressures: social-media discovery, convenience-seeking consumers, hybrid formats, rising costs, and fractured loyalty. The ones that survive won’t merely be “groceries that do foodservice” — they will become foodservice that happens to retail — owning more of the daily meal occasions, rooted in fresh convenience, seamlessly integrated across digital and physical touchpoints.

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter