When
Ronald Reagan famously declared, “Tear down this wall,” he wasn’t talking about
the barriers in fresh food retail—but today, those walls are crumbling faster
than ever. In 2025, the food industry has fully entered a phase of accelerated
channel blurring and consumer-driven disruption. What was once the realm of
traditional grocers is now a battleground for convenience-driven,
digital-first, and non-traditional players.
For
the first time in the history of the U.S. food retail landscape,
non-traditional retailers are commanding not just attention, but also share of
wallet—and stomach. Drugstores, e-commerce giants, club stores, and dollar
stores are now core components of how consumers source their daily meals and
snacks. According to the latest Supermarket News Top 75 Grocery
Retailers ranking, Amazon, Dollar General, CVS, and even regional convenience
store chains like Sheetz and Wawa are aggressively expanding their fresh food
and meal solution offerings.
The Rise of the Grocerant: The Meal is the New SKU
Consumers
today prioritize convenience, personalization, and speed. According to Foodservice Solutions® Grocerant
Guru®, the Ready-2-Eat and Heat-N-Eat segment—known as the Grocerant Niche—is
driving transformational change. This sector is not a trend; it's a
full-fledged shift. Fresh prepared meals, bundled meal components, and
grab-and-go options are being leveraged by every type of retailer—from Costco
and Amazon to 7-Eleven and Walgreens.
While legacy grocers still dominate top-line revenue, they're losing momentum. Consumers are increasingly migrating from grocery stores to c-stores, e-commerce platforms, and delivery-based services like HelloFresh, Factor, and Amazon Fresh. According to the USDA's most recent data, the share of food expenditures spent on "Food Away From Home" surpassed 55% in 2024, a record high, and a far cry from the days when supermarkets monopolized meal decisions.
Grocery Shoppers Are Migrating to Restaurants for Takeout
Meals & Meal Components
Another
accelerating trend in 2025 is the migration of traditional grocery shoppers to
restaurants—not for dine-in experiences, but for takeout meals and
mix-and-match meal components. Today, over 68% of restaurant orders are
consumed off-premises, according to Technomic, and a growing share of those
orders are replacing grocery trips entirely.
Consumers
seeking variety, speed, and restaurant-quality meals are leveraging takeout and
curbside pickup from fast-casual and quick-service chains in place of cooking
at home. Meal components such as rotisserie chickens, sides like
mac-and-cheese, Caesar salads, or global sauces are bundled together by
restaurants and marketed similarly to how grocers used to promote meal kits.
In
fact:
·
36% of Gen Z and Millennials
now say they buy dinner from a restaurant 3+ times per week to avoid grocery
shopping altogether (NPD Group, 2025).
·
Restaurants like Panera, Sweetgreen,
and Cava have begun packaging family meals and
modular meal kits as grab-and-go options, mimicking grocerant offerings.
·
Chick-fil-A and Panda Express
now promote bundled "family meals" that include entrees and shareable
sides—designed specifically to intercept grocery store dinner traffic.
This
movement isn't just about convenience—it's also about confidence. Many
consumers report they lack the time, skills, or energy to cook from scratch,
especially when global flavors or dietary needs are involved. As restaurants
lean into this grocerant-style positioning, the line between retail and
restaurant continues to blur. The net result: grocery stores are losing both
basket size and shopper frequency to restaurant brands that embrace meal
bundling, digital ordering, and portioned meal components.
Market Shakeup: Retail is Fragmenting
Today’s
consumer is loyal to no one. Brand and banner loyalty are fading as consumers
fluidly migrate between retailers and platforms based on need, occasion, and
experience. A consumer might buy produce at Aldi, get a heat-and-eat meal at
Walgreens, and subscribe to a plant-based meal kit—all in one week. This
fragmentation is both a challenge and an opportunity for brands who can meet
consumers wherever they are—on mobile, in-store, or at the curbside.
The
traditional “Big Three” grocers remain on top in gross revenue, but their
dominance is being chipped away at the edges:
·
No. 1 – Walmart:
Still leading with over $270 billion in grocery sales, thanks to omnichannel
fulfillment, expanded private label, and aggressive pricing.
·
No. 2 – Kroger:
Holding strong with $125 billion, buoyed by their investments in robotics,
digital fulfillment (via Ocado), and smart pricing.
·
No. 3 – Costco:
With $105 billion, Costco’s treasure-hunt model and expanding fresh food
assortment continues to drive traffic and loyalty.
But
the real story lies in the disruptors:
·
Amazon:
Now ranked in the top 10, with over $40 billion in food-related revenue,
combining Whole Foods, Amazon Fresh, and Prime deliveries.
·
Dollar General:
Emerging as a significant player, Dollar General now operates over 5,000 DG
Market stores with expanded perishables and fresh food lines.
·
CVS and Walgreens:
Both continue to evolve into neighborhood wellness and meal hubs, capturing the
convenience-first consumer with upgraded food options.
The New Competitive Set: Everyone Sells Food Now
Food
is no longer sold just in grocery aisles. It’s offered through TikTok shops,
livestream e-commerce, delivery apps, and micro-fulfillment centers. AI and
predictive analytics allow platforms to recommend meal solutions in real time.
Brands like Trader Joe’s, Erewhon, and Foxtrot Market are leaning into
experience, curation, and community to attract foodies, while value chains like
Lidl and Aldi emphasize price and quality.
Meanwhile,
meal kits and direct-to-consumer food startups are pivoting toward hybrid
retail, creating co-branded kiosks, in-store pickups, and even licensing their
menus to c-stores. The Grocerant Niche is no longer a side gig—it’s a core
growth engine across the board.
Who’s Next to Fall? Who’s Poised to Rise?
Legacy
giants like A&P, once untouchable, have long since faded into history.
Today, brands like Albertsons and Save A Lot face existential questions: Can
they adapt fast enough? Will they become acquisition targets or transform into
innovation leaders?
On the rise? Amazon’s vertical integration, Instacart’s tech-first grocery marketplace, and fast-growing regional players like H-E-B and Wegmans are setting the pace. Meal-first thinking is now essential. Brands like Sweetgreen, FreshRealm, and Cava are redefining how fresh food is marketed, sold, and consumed—digitally native, supply-chain savvy, and experiential by design.
Foodservice
Solutions® has been the global leader in Grocerant
Niche Strategy since 1991. As consumer behavior continues to shift, the
winners will be those who understand that fresh meals, not just groceries, are
the future of retail food.
Connect
with us:
·
LinkedIn: Grocerant
·
Twitter/X: @grocerant
·
Email: Steve@FoodserviceSolutions.us