The Grocery Store Isn’t the Destination Anymore: The Consumer Is

 

Mapping the New Retail Foodservice Melting Pot, For decades, the grocery store was the center of the American food universe according to Steven Johnson, Grocerant Guru®  at Tacoma, WA based Foodservice Solutions®.

Consumers went to the supermarket to buy ingredients. They went home to cook them. Restaurants were where they went when they wanted someone else to cook.

That model is no longer the consumer reality.

Today, the consumer doesn't think in terms of grocery, restaurant, convenience store or dollar store. The consumer thinks in terms of what do I want to eat, when do I want it, how much do I want to spend, and how much work do I want to do?

That is creating what I call The Retail Foodservice Melting Pot—a marketplace in which grocery stores, restaurants, convenience stores and value retailers are increasingly competing for the same meal occasions, the same food dollar and, most importantly, the same consumer.

And the biggest mistake food retailers can make in 2026 is to continue managing the store while failing to watch the customer.

The Consumer Hasn't Abandoned Tradition—They've Reinterpreted It

What families like for dinner has not fundamentally changed as much as the food industry sometimes assumes.

Many of the foods consumers love are familiar: pizza, chicken, burgers, sandwiches, pasta, tacos, salads, soups, breakfast foods and the recipes handed down from one generation to the next.

But differentiation does not mean different. It means familiar with a twist.

Grandma's recipe becomes Mom's recipe. Mom's recipe becomes her children's version. A restaurant puts its signature spin on it. A grocery deli makes a heat-and-eat version. A convenience store turns it into a grab-and-go meal. A food manufacturer puts it into a frozen or refrigerated format.

The consumer isn't necessarily asking for something completely new.

The consumer is asking for something familiar, convenient, affordable and better suited to today's life.

That distinction is critical.

The Consumer Is Building a New Food Map

The most important change taking place in food marketing is not simply that consumers are eating more meals away from home.

It is that the boundaries between channels are disappearing.

USDA data released in 2026 shows just how large the opportunity is. Total U.S. food spending reached $2.51 trillion in 2025, and food-away-from-home accounted for 56.3% of total food expenditures. Food-away-from-home spending reached $1.41 trillion in inflation-adjusted dollars.

That doesn't mean consumers have stopped eating at home.

It means the definition of home meal is changing.

A grocery-store rotisserie chicken, a deli salad, a prepared side dish, a restaurant takeout entrée, a drive-thru breakfast sandwich or a convenience-store pizza can all become part of the same household dinner.

The kitchen is still there.

But the kitchen is no longer doing all the work.

The New Consumer Equation: Familiar + Convenient + Valuable

FMI's 2025 U.S. Grocery Shopper Trends research found that shoppers continue to prioritize four major needs: health, entertainment, exploration and convenience. At the same time, 70% said they were extremely or very worried about rising grocery prices, while 78% were at least somewhat concerned about tariffs affecting food and ingredient costs.

This creates a fascinating consumer contradiction:

Consumers want to eat well—but they also want to spend wisely.

They want quality—but they don't necessarily want complexity.

They want convenience—but they don't necessarily want to sacrifice freshness.

They want familiar foods—but they also want discovery.

They want restaurant-like food—but they increasingly want restaurant-like food available in retail environments.

That is the Retail Foodservice Melting Pot.

Grocery Has Entered the Restaurant Business

Perhaps the clearest evidence comes from FMI's Power of Foodservice at Retail 2025 research.

The share of consumers using grocery-store deli-prepared foods instead of restaurant meals more than doubled—from 12% in 2017 to 28% in 2025.

Even more important, 53% of Americans now take a hybrid approach to meals, combining deli-prepared foods with items from their own kitchen. Retail foodservice dollar sales reached $52.1 billion, up 1.6% over the prior 12 months.

Think about what that means.

The grocery store doesn't have to replace the restaurant.

It can participate in the meal.

A consumer might purchase:

·       A grocery-store rotisserie chicken

·       A prepared salad

·       Fresh bakery bread

·       A refrigerated side dish

·       A beverage

·       Something from the pantry already at home

That isn't traditional grocery shopping.

That is retail foodservice.

And it is precisely why the deli, bakery, prepared-food department and fresh perimeter are becoming strategic foodservice assets rather than simply departments.

Millennials and Gen Z Are Rewriting What "Dinner" Means

The generational opportunity is especially revealing.

FMI found that 40% of Gen Z and 39% of Millennials have purchased "girl dinner" from grocery-store deli-prepared foods, compared with 22% of consumers overall.

More importantly, 56% of Millennials and 42% of Gen Z shoppers want grocery stores to help them more with meal planning, versus 38% of shoppers overall.

And the opportunity gets even bigger:

91% of Millennials and 87% of Gen Z consumers want bundled prepared meals containing a main course, sides and dessert at a discounted price.

That is not simply a merchandising request.

It is a foodservice request.

The consumer is essentially saying:

"Don't just sell me food. Help me solve dinner."

That is a profound shift.

Restaurants Have Moved Outside the Restaurant

Restaurants, meanwhile, have been moving in the opposite direction.

The National Restaurant Association's 2025 Off-Premises Restaurant Trends report found that 47% of adults pick up takeout at least weekly, 42% use a drive-thru weekly and 37% order delivery weekly. Nearly three-quarters of restaurant traffic now occurs off-premises.

In other words, the restaurant has also stopped being just a place.

It has become a food-production and fulfillment platform.

Drive-thru, takeout, delivery, mobile ordering, loyalty programs and meal bundles have transformed the restaurant into something that follows the consumer rather than waiting for the consumer to walk through the front door.

And consumers have become accustomed to it.

The Convenience Store May Be the Biggest Sleeper in the Melting Pot

Now look at the convenience channel.

According to NACS data released in 2026, U.S. convenience-store foodservice and merchandise sales reached $341.2 billion in 2025, up 1.7%. Foodservice represented 28.5% of in-store sales and 38.9% of in-store gross profit dollars.

Prepared food alone represented 73.9% of c-store foodservice sales.

That includes the foods consumers increasingly recognize as meals: pizza, chicken, burgers, sandwiches, wraps and salads.

The channel is changing rapidly.

Datassential's 2026 c-store research reports that nearly four out of five consumers already purchase prepared food at convenience stores at least occasionally, while prepared food's share of impulse purchases has increased substantially compared with three years ago.

That is not a fuel-stop phenomenon.

That is foodservice migration.

And Here Is the Wake-Up Call for C-Stores

NACS reports that roughly one-third of convenience-store shoppers plan to stop at a QSR within 30 minutes of visiting the c-store.

The estimated lost opportunity exceeds $100 billion annually. The reasons shoppers leave include variety and availability.

Read that again.

The consumer is already in the convenience store.

The retailer has the customer.

The retailer has the need state.

The retailer has the foodservice infrastructure.

And yet the consumer still leaves to get food somewhere else.

That is a customer-watching problem—not merely a category-management problem.

Value Has Become More Complicated Than Price

This is where food marketers need to be careful.

For several years, the industry has treated value as synonymous with lower price.

The consumer increasingly defines value more broadly.

Circana found in 2025 that consumer-perceived value-menu traffic increased 1% while overall restaurant traffic declined 1%. Fifty percent of consumers who had not recently dined out said lower prices would encourage them to return.

But Circana's 2026 analysis makes the larger point: foodservice traffic in the United States declined only 0.3% in 2025, while average spending per visit continued to rise.

And the latest 2026 restaurant environment is demonstrating that discounting alone isn't enough. Consumers are responding to combinations of price, quality, innovation, convenience and experience.

That is why a $10 meal can be a better value than a $7 meal if it eliminates preparation, saves time, satisfies a craving and delivers quality.

Value is what the consumer believes they received—not what the retailer believes it charged.

The Real Competitor Is the Meal Occasion

This is where traditional category management begins to break down.

A grocery executive may be watching:

·       Produce

·       Meat

·       Dairy

·       Frozen

·       Bakery

·       Deli

·       Center store

·       Beverages

A restaurant executive may be watching:

·       Entrées

·       Appetizers

·       Beverages

·       Dayparts

·       Drive-thru

·       Delivery

·       Takeout

A convenience executive may be watching:

·       Fuel

·       Packaged beverages

·       Snacks

·       Prepared food

·       Coffee

·       Dispensed beverages

But the consumer is watching none of those categories.

The consumer is watching dinner.

Or lunch.

Or breakfast.

Or a snack.

Or "I don't want to cook."

Or "I have 10 minutes."

Or "I want something healthier."

Or "I need to feed four people for $30."

That is the map the industry needs to follow.

The New Competitive Set Is Not a Store—It Is a Solution

The most important food marketing competition of 2026 may be occurring between solutions rather than retailers.

Consider a family at 5:30 p.m.

Solution A: Buy ingredients and cook for an hour.

Solution B: Pick up a restaurant meal.

Solution C: Use the restaurant drive-thru.

Solution D: Order delivery.

Solution E: Stop at the grocery deli and buy prepared entrées and sides.

Solution F: Stop at a convenience store for pizza, chicken, sandwiches and beverages.

Solution G: Visit a value retailer and supplement what is already at home.

These aren't separate consumer behaviors.

They are competing solutions to the same consumer need state.

And that is why channel-based thinking is becoming less useful.

Technology Can Tell You What Happened. The Customer Tells You Why.

Food retailers have invested heavily in technology.

They can measure inventory.

They can monitor shrink.

They can track SKU productivity.

They can analyze basket size.

They can forecast demand.

They can measure labor.

They can identify out-of-stocks.

They can personalize promotions.

They can monitor margins.

All of that is valuable.

But technology can become a dangerous distraction if retailers become better at monitoring the store than understanding the customer.

The real question isn't:

"Which category grew 2.4%?"

The real question is:

"Why did the customer choose this meal instead of the meal we could have sold them?"

That is a completely different question.

The Customer Has Become the Ultimate Category Manager

The consumer is now the industry's ultimate category manager.

The consumer decides whether:

·       A deli chicken competes with a rotisserie chicken restaurant.

·       A prepared sandwich competes with a QSR.

·       A grocery-store pizza competes with a pizza chain.

·       A c-store breakfast competes with a drive-thru.

·       A $5 beverage becomes the reason for a store visit.

·       A prepared meal replaces cooking.

·       A snack becomes lunch.

·       A combination of deli foods becomes dinner.

And increasingly, the consumer doesn't care which channel won.

They care that the problem was solved.

That is the biggest food marketing lesson emerging from 2025 and accelerating through 2026.

The Future Belongs to Retailers That Watch the Consumer

FMI reports that 87% of food retailers were leveraging fresh-prepared foodservice programs in 2025, with 63% reporting success. FMI also found that foodservice was the top workforce-expansion focus within fresh foods, while fresh foods accounted for an average 39% of online sales revenue.

The investment is already happening.

The question is whether retailers are organizing that investment around departments—or around consumers.

Because the consumer doesn't want a better deli department.

The consumer wants a better dinner.

The consumer doesn't want a better bakery department.

The consumer wants something good to eat.

The consumer doesn't want a better beverage category.

The consumer wants a drink that fits the occasion.

The consumer doesn't want another loyalty promotion.

The consumer wants a reason to come back.

The Retail Foodservice Melting Pot is already here.

Grocery is becoming foodservice.

Foodservice is becoming retail.

Convenience is becoming restaurant-like.

Restaurants are becoming increasingly retail-like.

And consumers are moving freely among all of them.

The winners will not necessarily be the companies with the most technology, the largest stores, the biggest menus or the most SKUs.

The winners will be the companies that understand the consumer's next meal better than their competitors do.

 

Three Insights from the Grocerant Guru®

1. Stop Watching Departments. Start Watching Meal Occasions.

The consumer does not wake up thinking, "Today I'm going to shop the deli department."

They think, "What's for dinner?"

Retailers need to measure the total meal opportunity across departments, channels and competitors—not simply department sales.

The next generation of category management should be consumer-occasion management.

2. Differentiation Does Not Mean Different.

The biggest opportunity is not necessarily to invent another food consumers have never seen.

It is to take something consumers already love and make it easier, faster, fresher, more convenient, more affordable or more interesting.

Familiar food with a twist remains one of the most powerful formulas in food marketing.

3. The Store Is Not Your Competitor's Store. The Customer Is Your Competitor's Customer.

The consumer has become channel agnostic.

They will buy breakfast from a drive-thru, lunch from a c-store, dinner from a grocery deli and dessert from a restaurant—and think nothing of it.

If you are only watching what happens inside your four walls, you are watching yesterday's customer.

The Grocerant Guru® believes the future belongs to companies that can identify, quantify and qualify where the consumer is moving before the competition does.

Success does leave clues.

Foodservice Solutions® is a global leader in grocerant niche business development, helping food retailers, restaurants, convenience stores and food companies identify, quantify and qualify additional food retail and foodservice opportunities.

Has your company had a Grocerant ScoreCard, Grocerant Program Assessment or new Grocerant Niche Product Ideation study?

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253-759-7869
Steve@FoodserviceSolutions.us

Foodservice Solutions® | Grocerant Guru®