Walmart Just Changed the Food Game: It Understands Food Customers Better Than Fast-Food Retailers Do

Steven Johnson, The Grocerant Guru® at Tacoma, WA based Foodservice Solutions® says Walmart’s next big food opportunity isn’t simply selling more groceries—it is capturing more of the consumer’s eating occasions.

There is a significant change underway in the American food marketplace, and Walmart deserves credit for recognizing it.

Walmart is moving beyond traditional grocery delivery and into something much bigger: bringing groceries, fresh prepared food, restaurant meals, snacks and beverages together in one delivery experience.

In June 2026, Walmart began allowing eligible customers to order Subway directly through Walmart’s app or Walmart.com, including the ability to combine Subway with a Walmart Express grocery delivery. Walmart subsequently announced an expansion with Dunkin', beginning with approximately 150 Dunkin' locations inside Walmart stores and ultimately expanding to thousands of standalone locations.

The significance isn't simply that Walmart is delivering restaurant food.

Walmart is recognizing how consumers increasingly want to eat.

The consumer doesn't necessarily care whether dinner came from a supermarket deli, a restaurant kitchen, a convenience store or their own oven.

They care about taste, freshness, convenience, speed, value and choice.

That shift is creating a much larger opportunity for Ready-to-Eat and Heat-N-Eat food.

 

Consumers Are Eating at Home—But Increasingly They're Not Cooking From Scratch

For decades, the food industry largely divided meals into two categories:

Grocery = food you prepare.

Restaurants = food somebody else prepares.

That distinction is becoming outdated.

A growing portion of the market is now food prepared somewhere else and consumed at home.

That includes:

·       Ready-to-Eat meals

·       Heat-N-Eat entrées

·       Prepared deli foods

·       Restaurant takeout and delivery

·       Fresh sandwiches

·       Rotisserie chicken

·       Prepared salads

·       Pizza

·       Breakfast sandwiches

·       Fresh snacks

·       Bakery products

·       Coffee and other beverages

This is the expanding Grocerant economy.

And the consumer data increasingly supports it.

 

2024: Convenience Became Part of “Value”

FMI research conducted with Circana and Oliver Wyman in 2024 found that consumers were redefining value beyond price, with convenience, health and ease of preparation becoming increasingly important.

FMI reported that 87% of morning eating occasions and 76% of midday eating occasions were sourced from home, while 65% of morning eating occasions were prepared in less than five minutes.

That is an important distinction:

Eating at home does not mean cooking from scratch.

FMI also reported in 2024 that shoppers were using semi-prepared and fully prepared retail foods to supplement—or replace—meals prepared from scratch. A growing number were using a hybrid approach, combining prepared foods with foods they prepared themselves.

That is exactly where grocery foodservice and restaurant delivery begin to overlap.

 

2025: Grocery Stores Became More Serious Restaurant Competitors

The trend became even clearer in 2025.

FMI's Power of Foodservice at Retail 2025 found that the percentage of consumers choosing deli-prepared food instead of restaurant meals had more than doubled—from 12% in 2017 to 28% in 2025.

FMI also found that 53% of Americans were using a hybrid approach to create meals, combining deli-prepared foods with items from their own kitchens.

Retail foodservice dollar sales reached $52.1 billion, according to FMI.

The implication is important:

The grocery store is no longer competing only for the grocery budget. It is competing for the meal.

That makes Walmart's strategy especially interesting.

Walmart already has the grocery customer.

Now it can increasingly offer that customer restaurant food without requiring a separate restaurant transaction.

 

Restaurant Customers Are Asking for More Convenience, Too

The restaurant industry is sending the same signal from the other direction.

The National Restaurant Association reported in its 2025 Off-Premises Restaurant Trends research that nearly 75% of restaurant traffic occurred off-premises, including takeout, delivery and drive-thru.

Among adults:

·       47% picked up takeout at least weekly.

·       42% used the drive-thru weekly.

·       37% ordered delivery weekly.

The same research found that 66% of consumers wanted more choices from restaurants offering takeout, while 61% wanted more delivery choices.

Consumers are clearly comfortable with restaurant food coming to them.

Walmart's opportunity is to add that restaurant choice to a shopping ecosystem consumers already use.

 

Walmart's Real Advantage: The One-Basket Food Customer

Consider a typical evening order:

Milk.

Eggs.

Bananas.

Dog food.

Paper towels.

A prepared salad.

Dinner.

A snack.

Coffee for tomorrow morning.

Historically, those purchases might require multiple decisions and potentially multiple transactions.

Walmart can potentially combine them.

One customer. One digital basket. Multiple food occasions.

That is where Walmart's strategy becomes strategically different from traditional restaurant delivery.

A restaurant delivery platform typically begins with:

“What restaurant do you want?”

Walmart can begin with:

“What do you need?”

That difference matters because Walmart already has a broad grocery and household shopping relationship with millions of consumers.

Walmart also says its stores are within 10 miles of approximately 90% of the U.S. population, giving the company an extensive physical footprint for its delivery strategy.

 

2026: Grocery Foodservice Is Moving Forward

The opportunity isn't limited to Walmart.

FMI's 2026 industry research reports that 77% of food retailers plan to increase the space allocated to foodservice, including fresh-prepared grab-and-go offerings.

FMI also reported that 94% of shoppers purchased groceries both online and in-store during 2025, reinforcing how thoroughly food shopping has become omnichannel.

Meanwhile, Circana continues to identify convenience and delivery as important components of the evolving foodservice marketplace.

Put those trends together and the direction is clear:

Consumers want more food prepared for them, more convenient ways to get it and more choices about where it comes from.

That creates an enormous opportunity for Ready-to-Eat and Heat-N-Eat food across grocery, restaurants and convenience stores.

 

Walmart Isn't Becoming a Restaurant—It's Becoming a Food Occasion Aggregator

This is where I believe Walmart deserves real credit.

Walmart doesn't have to become McDonald's, Subway or Dunkin'.

It can let those brands remain what they are.

Instead, Walmart can potentially become the platform through which consumers access multiple food choices while simultaneously buying their groceries and household necessities.

Dinner can come from a restaurant.

Breakfast can come from Dunkin'.

Lunch can come from the grocery deli.

Snacks can come from the supermarket aisle.

Tomorrow's ingredients can come from the same order.

That is food-channel convergence.

And it changes the competitive equation.

The question isn't simply whether Walmart can deliver restaurant food.

The more important question is whether Walmart can capture more of the consumer's food spending by making the entire food-shopping experience easier.

 

The Fast-Food Industry Should Be Paying Attention

Traditional restaurant operators have historically measured competition primarily against other restaurants.

That isn't enough anymore.

A consumer deciding what to eat has increasingly more alternatives:

Cook it.

Heat it.

Grab it from the deli.

Pick it up at a restaurant.

Order it for delivery.

Buy it from a convenience store.

The winning operator will be the one that best answers the consumer's fundamental question:

“What can I eat right now with the least amount of effort?”

Walmart's emerging strategy is built around answering that question with a very broad assortment.

 

Three Insights From the Grocerant Guru®

1. The real competitor isn't always another restaurant.

It may be the consumer's kitchen.

Every restaurant should be asking:

What makes our food easier, faster, better or more desirable than preparing something at home?

The answer has to go beyond price.

2. Walmart is turning convenience into an ecosystem.

Restaurants generally sell convenience one meal at a time.

Walmart has the opportunity to combine groceries, prepared foods, restaurant meals, snacks and beverages into one digital basket.

That can increase both convenience for the consumer and the number of food occasions Walmart participates in.

3. The future of food competition is about owning the occasion—not the channel.

Consumers don't think:

“I need a grocery-store meal.”

They think:

“I'm hungry.”

They don't think:

“I need a restaurant.”

They think:

“What's for dinner?”

That is why Walmart's strategy matters.

The Grocerant Guru® bottom line:

Walmart isn't just delivering restaurant food. It is removing the traditional walls between grocery, restaurant, convenience and foodservice.

The retailers and restaurant operators that understand this shift—and make Ready-to-Eat and Heat-N-Eat food easier to discover, purchase and consume—will be positioned to capture more of the consumer's most valuable asset:

Their next eating occasion.

Elevate Your Brand with Expert Insights

For corporate presentations, regional chain strategies, educational forums, or keynote speaking, Steven Johnson, the Grocerant Guru®, delivers actionable insights that fuel success.

With deep experience in restaurant operations, brand positioning, and strategic consulting, Steven provides valuable takeaways that inspire and drive results.

Visit GrocerantGuru.com or FoodserviceSolutions.US Call 1-253-759-7869

 

What Are They Talking About? Albertsons, AI and the Dangerous Addiction to Basket Size

 

Yesterday’s Metrics May Make a Legacy Grocer Look Right for a Month. They Could Make Them Wrong for a Year. There is something wonderfully modern—and potentially very old-fashioned—about the latest Albertsons story according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Albertsons is using artificial intelligence to make shoppers’ baskets bigger.

According to The Wall Street Journal, Albertsons says shoppers using its conversational AI tools generate baskets approximately 10% larger, while shoppers using more complex AI experiences—such as recipe creation and dietary-specific shopping—produce baskets as much as 26% larger.

That is a real accomplishment.

And Albertsons deserves credit for doing something many retailers have struggled to do: turning an emerging technology into a measurable commercial result.

But here is the question the grocery industry should be asking:

What if Albertsons is measuring the wrong victory?

What if AI is not primarily a basket-building machine?

What if AI is actually telling Albertsons something far more important about how consumers now shop for food?

That distinction matters.

Because a bigger basket can make yesterday's grocery manager look brilliant.

But understanding why consumers are shopping differently is what determines whether that manager is still relevant next year.

And that is where the grocery industry's obsession with legacy metrics—including basket size, average transaction value, units per transaction and weekly sales—can become dangerous.

The Grocery Industry Has a Basket Problem

For decades, grocery executives were trained to think about the store as a destination.

The consumer came to the supermarket.

The consumer pushed a cart.

The consumer filled the cart.

The retailer measured the size of the basket.

More items were good.

More dollars were better.

More trips were better still.

That model made perfect sense when the supermarket was one of the dominant places where consumers purchased food.

But the consumer did not sign a contract promising to remain loyal to the supermarket.

The consumer migrated.

The food dollar migrated.

The meal migrated.

The occasion migrated.

And increasingly, the consumer is shopping across channels rather than inside a single channel.

That is the story the industry's legacy metrics don't tell very well.

Look Back to 1990: The Beginning of the Migration

In 1990, approximately 46% of restaurant traffic was already off-premise, up from 44% in 1987. Carryout was the dominant form of off-premise restaurant business, although drive-thru was beginning to accelerate.

That was not a small behavioral footnote.

It was an early warning.

Consumers were beginning to say:

“I want restaurant food. I just don't necessarily want to eat it in your restaurant.”

That distinction eventually transformed foodservice.

And grocery executives who were looking only at supermarket transactions could easily miss it.

NPD data provide another fascinating marker. Americans averaged approximately 55 restaurant takeout meals per person in 1990. By 2000, that figure had climbed to approximately 70 meals per person—a gain of roughly 27% in a decade.

Meanwhile, in 2000, restaurant dining itself declined to approximately 64 meals per person, down from 66 in 1999. Takeout was not some futuristic concept. It was already becoming a mainstream meal occasion.

The lesson was sitting in plain sight:

Consumers weren't abandoning foodservice. They were changing the way they consumed it.

And Grocery Was Changing Too

The same period produced another important signal.

Supermarket foodservice sales were estimated at approximately $4.71 billion in 1990.

By 1997, supermarket foodservice had grown to approximately $14.82 billion—more than three times the 1990 level.

That was the beginning of what we now call the grocerant opportunity.

The supermarket wasn't simply selling ingredients anymore.

It was beginning to sell solutions to the meal problem.

Ready-to-eat.

Heat-and-eat.

Prepared meals.

Deli foods.

Grab-and-go.

Home meal replacement.

The consumer was increasingly outsourcing some of the labor of eating.

That trend did not disappear.

It accelerated.

Meanwhile, the C-Store Was Learning the Same Lesson

Convenience stores offer perhaps the clearest historical example of why legacy metrics can be misleading.

In the early 1990s, a convenience store was still largely understood as a place to buy gasoline, tobacco, beverages, snacks and other immediate-consumption items.

But the industry's innovators began looking at something different:

What if the c-store could become a food destination?

7-Eleven began shipping fresh food products daily during the 1990s as it responded to consumers who wanted fresher, more convenient food.

By 2000, 7-Eleven was operating a sophisticated refrigerated distribution system, including a fleet of 275 refrigerated trucks delivering fresh food.

That was not merely merchandising.

It was a recognition that the consumer's definition of "where I buy food" was changing.

And today the numbers are extraordinary.

NACS reports that foodservice accounted for 27.7% of convenience-store in-store sales in 2024, while producing 38.6% of in-store gross margin dollars. Prepared food represented 72.6% of foodservice sales.

In 2025, foodservice represented 28.5% of c-store in-store sales and 38.9% of in-store gross-margin dollars, with prepared food representing approximately 74% of foodservice sales.

That is not a gas station with food.

That is a food retailer that happens to sell gasoline.

And that is exactly the kind of channel migration legacy grocery metrics can miss.

The Grocery Store Lost Its Monopoly on the Meal

Here is perhaps the most important long-term food fact.

USDA data show that food-away-from-home spending has steadily taken share from food-at-home spending.

In 2000, consumers spent approximately 9.9% of disposable personal income on food, with 5.7% going to food at home and 4.2% to food away from home.

By 2025, consumers were still spending approximately 9.7% of disposable income on food, but the split had changed dramatically: about 4.8% on food at home versus 4.9% on food away from home.

The consumer didn't necessarily decide:

"I am a grocery shopper."

or

"I am a restaurant customer."

The consumer decided:

"I need dinner."

And then chose the channel that best solved dinner.

That is the real competitive battlefield.

Today's Consumer Is a Food Shopper, Not a Grocery Shopper

This distinction is critical.

The grocery industry frequently describes consumers as grocery shoppers.

But consumers don't wake up thinking:

“I need to increase my basket size today.”

They wake up thinking:

·       What's for dinner?

·       What can I make quickly?

·       What can I afford?

·       What do the kids want?

·       Do I have time to cook?

·       Should I order?

·       Should I pick something up?

·       Should I stop at a c-store?

·       Can the grocery deli solve this?

·       Can I get everything delivered?

·       Can AI figure it out for me?

That is a fundamentally different consumer mindset.

And current data demonstrate just how fragmented the grocery journey has become.

FMI's 2026 U.S. Grocery Shopper Trends research found that Americans visit an average of 5.4 different grocery banners each month. Gen Z and millennials shop across even more banners. The average household makes about 2.8 grocery shopping trips per week.

So when a retailer celebrates a larger basket, the more important question may be:

Did we increase the consumer's share of stomach—or simply make one transaction bigger?

Those are not the same thing.

The Basket Can Be Bigger While the Relationship Gets Smaller

This is where I believe the Albertsons story becomes much more interesting.

Albertsons says its AI tools encourage shoppers to move across categories instead of "spearfishing" for one item.

Exactly.

But notice what just happened.

The technology did not simply convince someone to buy another box of cereal.

It helped the consumer construct a meal occasion.

A recipe.

A dietary solution.

A shopping mission.

An event.

The AI is connecting the dots between categories because the consumer's mission crosses categories.

That is much more important than the 10% or 26% basket increase.

The technology is revealing that the consumer doesn't naturally think in supermarket departments.

Consumers think:

“Taco night.”

“Dinner for four.”

“High-protein lunch.”

“I need something quick.”

“I'm watching what I eat.”

“What can I make with what's already in my refrigerator?”

The consumer thinks in occasions.

Legacy grocery management thinks in aisles.

That is the strategic disconnect.

Albertsons Asked Technology for a Number—and Technology Gave It One

I want to say something nice about technology here.

Technology is doing exactly what Albertsons asked it to do.

The company asked AI to help improve the shopping experience and generate measurable ROI.

AI helped generate larger baskets.

That's good.

Very good.

But technology can give executives the answer they request without necessarily giving them the strategic insight they need.

The more valuable insight may be this:

AI is revealing that consumers want help solving food occasions, not simply finding products.

That is a much bigger opportunity.

And it goes far beyond Albertsons.

eMarketer estimates that approximately 79.6 million U.S. consumers will use AI platforms and assistants for shopping in 2026, up about 25% from the prior year. It projects AI platforms could influence as much as 13.7% of U.S. retail ecommerce sales by 2029, representing approximately $225 billion.

That means the next grocery battleground may not be:

Who has the biggest basket?

It may be:

Who gets invited into the consumer's decision before the basket exists?

That's a very different game.

The Consumer Has Moved Again

Consider the progression.

1990

The supermarket was dominant.

Restaurant off-premise traffic was already approximately 46%.

Restaurant takeout averaged roughly 55 meals per person.

Supermarket foodservice was about $4.7 billion.

Convenience stores were primarily convenience destinations, with foodservice still an emerging proposition.

2000

Restaurant takeout had reached approximately 70 meals per person.

Restaurant meals eaten on-premise were approximately 64 per person.

Supermarket foodservice had already exploded compared with 1990.

C-stores were investing in fresh food and prepared food.

And consumers were increasingly looking for easy meals rather than simply ingredients.

2025–2026

Food-away-from-home spending has essentially reached parity with food-at-home spending.

C-store foodservice is approaching 30% of in-store sales and nearly 40% of gross-margin dollars.

Grocery shoppers visit multiple banners every month.

Digital technology is now used by 77% of grocery shoppers before shopping and 71% while shopping.

And grocery's prepared-food operation is increasingly competing directly with restaurants.

FMI's 2025 foodservice-at-retail research found that consumers choosing deli-prepared food instead of restaurant meals more than doubled—from 12% in 2017 to 28% in 2025. More than half of Americans, 53%, are also combining deli-prepared foods with food from their own kitchens.

That's not a grocery category story.

That's a food-channel story.

The Legacy Grocery Sector Is Looking Backward

This is where the phrase “What are they talking about?” comes into play.

When a grocery executive says:

"Our basket is up."

My response is:

Compared with what?

And more importantly:

What happened to the consumer before and after that basket?

Did the customer visit you less frequently?

Did they shop another banner?

Did they order restaurant takeout?

Did they buy lunch at a c-store?

Did they purchase prepared food instead of ingredients?

Did they use delivery?

Did they use AI to determine what to buy?

Did they buy fewer items per trip but make more trips?

Circana has already documented this tension. In its analysis of changing grocery behavior, quick trips were growing while the number of items purchased per trip was falling. Quick trips grew 8.9%, while items per trip declined 11%; importantly, consumers were purchasing more items from the perimeter, including deli-prepared and heat-and-eat meals.

That is precisely why basket size alone can become a trap.

A smaller basket isn't necessarily bad.

A larger basket isn't necessarily good.

The question is:

What consumer behavior produced it?

The New Grocery Scorecard

The legacy grocery scorecard was built around:

Basket size.

Average transaction.

Units per transaction.

Same-store sales.

Promotional lift.

Trips.

Market share.

Those metrics still matter.

But they are no longer enough.

The new scorecard needs to measure:

Share of meal occasions.

Share of prepared-food occasions.

Foodservice penetration.

Cross-channel share of stomach.

Digital decision influence.

Customer mission capture.

Time-to-meal.

Prepared-food repeat rate.

Consumer lifetime value across channels.

How often the retailer is chosen before the consumer chooses the product.

That last metric may ultimately be the most important.

Because the Competition Isn't the Grocery Store Anymore

The competition is not simply Kroger versus Albertsons.

It isn't Walmart versus Costco.

It isn't supermarket A versus supermarket B.

The competition is:

Whoever can solve the consumer's food problem best.

That could be a supermarket.

A club store.

A dollar store.

A restaurant.

A fast-food drive-thru.

A convenience store.

A grocery deli.

A meal kit.

A delivery platform.

Or increasingly, an AI assistant that tells the consumer what to buy and where to buy it.

That is why the grocery industry's obsession with historical benchmarks worries me.

Yesterday's consumer did not have today's choices.

And tomorrow's consumer will have choices that don't exist today.

Three Warnings From the Grocerant Guru®

1. Stop Worshipping the Basket

A bigger basket is a result.

It is not a strategy.

If management celebrates a 10% larger basket while failing to understand why customers are shopping across five-plus grocery banners, eating restaurant food, buying prepared food at c-stores and using AI to construct meals, management may be optimizing the rearview mirror.

Measure the consumer's total food journey—not just the transaction that occurred inside your four walls.

2. Stop Managing Departments and Start Managing Meal Occasions

Consumers don't eat "deli."

They eat lunch.

They don't eat "produce."

They eat dinner.

They don't buy "ingredients."

They solve meals.

The grocery retailer that can own the meal occasion has a much greater opportunity than the retailer that simply gets better at moving individual SKUs.

The future of grocery is not the biggest basket. It is the best food solution.

3. Legacy Grocery Must Escape the Past Before the Past Becomes the Future

There is nothing wrong with experience.

There is nothing wrong with proven metrics.

There is nothing wrong with knowing how the grocery business worked in 1990, 2000 or 2010.

The danger begins when yesterday's success becomes today's strategy.

The consumer has already moved from:

Store → aisle → product → basket

to:

Need → occasion → solution → channel → meal.

And now AI is beginning to insert itself before the entire sequence.

That is why the legacy grocery sector may be in a more dangerous position than simply being stuck in the middle.

It could be stuck in the past.

And being stuck in the past is far more dangerous than being stuck in the middle—because management can continue to produce perfectly respectable numbers while the consumer quietly moves somewhere else.

The Grocerant Guru® Bottom Line:

Albertsons may have discovered how to make the basket bigger.

The bigger opportunity is discovering why the consumer wanted help building the basket in the first place.

That is the insight.

The basket is merely the receipt.

And in the food business, the receipt tells you what happened. The consumer tells you what happens next.

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