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