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That distinction is becoming outdated.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

 

Walmart, This Is What Happens When You’re Stuck in the Middle

 

The Grocerant Guru® on why Walmart, Kroger and Publix are discovering that the middle of grocery retail is becoming the most dangerous place to be.

Walmart has a customer problem hiding inside what otherwise looks like a very large success story.

It is not that Walmart is losing shoppers. It is that the shoppers Walmart needs most are increasingly deciding that they can get a better deal, a better experience, better products—or all three—somewhere else.

That is what happens when you get stuck in the middle.

New Numerator data makes the point dramatically. Gen Z shoppers added 77 million trips and $3.4 billion in spending at Walmart over the past year, including nearly $1.2 billion more in beverages, snacks, candy and frozen foods. Higher-income households added another 115 million trips and $8.9 billion in spending, much of it online.

But here is the problem: Walmart's historic customer base is moving in the opposite direction.

Boomers made 160 million fewer Walmart trips for CPG purchases, taking $6.2 billion in spending with them. Walmart recovered only $3.5 billion of that through Boomer online shopping. Amazon, meanwhile, captured another $5 billion in Boomer CPG spending.

Lower-income households moved $7.8 billion of spending away from Walmart stores, while Walmart recovered $7.3 billion online.

The numbers tell a much more interesting story than simply saying Walmart is winning Gen Z.

Walmart is replacing customers rather than simply growing customers.

And replacement is not the same thing as loyalty.

The Middle Is Getting Squeezed

For decades, Walmart owned an extraordinarily powerful position: good enough products, very broad assortment, enormous scale and low prices.

But grocery retail has changed.

Consumers now have more choices, more information, more digital tools and more reasons to shop multiple stores.

FMI's 2026 U.S. Grocery Shopper Trends research found that consumers visit more than five grocery banners per month on average.

That is the new competitive reality.

Consumers don't necessarily choose one grocery store anymore.

They choose the best retailer for the mission.

ALDI can be the value mission.

Costco can be the stock-up mission.

Whole Foods can be the quality mission.

Trader Joe's can be the discovery mission.

WinCo can be the low-price bulk-and-basket mission.

Lidl can be the value-plus-quality mission.

A traditional supermarket can win the fresh-food mission.

And Walmart can become the retailer consumers visit when it happens to be convenient.

That is a very different competitive position.

Look at ALDI

ALDI isn't trying to be everything to everybody.

It is aggressively defining what it stands for.

In January 2026, ALDI announced plans to open more than 180 stores during 2026, bringing its U.S. store count close to 2,800, with a goal of reaching 3,200 stores by the end of 2028.

Even more telling: ALDI said 17 million new customers visited its stores in 2025, and approximately one in three U.S. households shopped at ALDI during the year.

That is not merely a price story.

It is a positioning story.

ALDI has made the shopping experience itself part of the brand.

WinCo Understands the Value Mission

WinCo takes another route.

Its proposition is remarkably simple: low prices without making customers jump through loyalty-program hoops.

The employee-owned retailer describes itself as the “Supermarket Low Price Leader,” and its sales specials are available to everyone—no rewards card and no minimum purchase required.

That simplicity matters.

When a consumer walks into a WinCo, the retailer doesn't need a complicated explanation for why it exists.

Price is the message.

And when inflation has changed the psychological relationship consumers have with food prices, that clarity becomes powerful.

Lidl Is Selling Value Without Apologizing for Quality

Lidl is attacking the same middle from a different angle.

Its U.S. stores are built around a curated assortment, private brands, fresh food and imported products—while maintaining a value proposition.

Lidl says approximately 80% of its products are private label, and its U.S. footprint now exceeds 190 stores.

More importantly, Placer.ai data cited by Grocery Dive showed Lidl visits increased 4.9% year over year during the first half of 2025, compared with a 1.5% increase for the overall grocery segment.

That is what a differentiated proposition looks like.

Lidl isn't merely saying, "We're another supermarket."

It is saying:

You can get quality here without paying supermarket prices.

That is a much sharper message.

And Yes, Winn-Dixie Belongs in This Conversation

Winn-Dixie is an especially interesting example because it is attempting to reclaim relevance through neighborhood service, value and fresh food.

In January 2026, Southeastern Grocers officially became The Winn-Dixie Company and described the strategy as strengthening neighborhoods while delivering value and service.

Meanwhile, seven former Harveys locations were converted to Winn-Dixie stores in 2026 as the company consolidated its banners around the Winn-Dixie identity.

The lesson isn't that Winn-Dix has solved grocery retail.

The lesson is that a legacy retailer has to stand for something.

Walmart, Kroger and Publix: Three Different Versions of the Middle

This is where the grocery industry's current story gets particularly interesting.

Walmart isn't alone.

Kroger and Publix are also facing an increasingly complicated consumer landscape, although their situations are different.

Kroger's first quarter 2026 identical sales, excluding fuel, increased only 1.0%, while e-commerce sales grew 19%.

Publix provides an even more revealing data point.

Its 2025 sales increased 5% to $62.7 billion, but comparable-store sales rose 3.5%, with the company explicitly noting that inflation contributed to comparable-sales growth.

Then the environment changed.

In the second quarter of 2026, Publix sales increased only 1%, while comparable-store sales declined 0.5%. For the first six months, sales increased 1.5%, while comparable-store sales declined 0.3%. Publix said economic conditions affecting consumer spending contributed to the decline.

So I would not say Walmart, Kroger and Publix are all "failing."

That would be lazy analysis.

I would say something more important:

The traditional supermarket model is finding it increasingly difficult to command the center of the consumer's wallet.

The Data From 2024 to 2026 Tells the Story

In 2024, food-at-home prices increased just 1.2%, dramatically below the 5.0% increase in 2023 and 11.4% increase in 2022. Yet consumers were still feeling the accumulated effect of several years of food inflation.

And the consumer's response was not simply "buy less."

Consumers became better shoppers.

They traded between brands.

They increased private-label purchases.

They changed stores.

They changed channels.

They changed basket composition.

By 2025, USDA data showed food-at-home prices increased 2.3%, while food-away-from-home prices increased 3.8%.

And the channel itself continued to fragment.

FMI and NIQ reported in 2025 that more than 90% of grocery shoppers were shopping both online and in stores, with online grocery sales projected to reach $388 billion, or nearly 25% of the market, by 2027.

By 2026, the omnichannel shift had become even more important: FMI and NIQ reported that online sales generated nearly three-quarters of total grocery dollar growth in 2025, with the U.S. online grocery market projected to reach $452 billion by 2028.

And the price pressure isn't gone.

The July 2026 CPI showed food-at-home prices were still 2.7% higher year over year, with fruits and vegetables up 5.1% and nonalcoholic beverages up 4.1%.

USDA's July 2026 forecast calls for food-at-home prices to increase 2.7% for the full year, with beef and veal among the categories expected to rise faster than their historical averages.

In other words, consumers are still shopping in an inflationary environment—but they have become much more sophisticated about where, what and how they buy.

Private Label Is No Longer a Backup Plan

This may be the biggest warning sign for traditional supermarkets.

Circana reported that U.S. private-brand sales had already surpassed $217 billion and continued gaining momentum.

Then NIQ reported in 2025 that 69% of global respondents viewed private label as good value for money and 68% considered it a good alternative to national brands.

In 2026, FMI found that 92% of U.S. grocery shoppers had store-brand products in their homes, private-brand dollar sales were growing 2.8% year over year, and 94% said they would continue buying private brands even if grocery prices declined.

And here's the kicker:

59% of Gen Z shoppers said they had purchased more private-brand products during the past year.

That means private label isn't simply an economic response anymore.

It is becoming brand preference.

That changes the game for Walmart.

It also changes the game for Kroger.

It changes the game for Publix.

And it changes the game for every traditional grocer that still thinks the consumer's decision begins with a national brand.

The Grocerant Guru® View: Walmart Has a Positioning Problem

Walmart is still enormous.

The company generated $713.2 billion in fiscal 2026 revenue, serves approximately 280 million customers and members each week and operates more than 10,900 stores across 19 countries.

Those numbers are extraordinary.

But scale is not a strategy.

And here's where the Grocerant Guru® sees the problem.

Walmart is simultaneously trying to become:

cheaper than everybody, better than expected, more premium than before, more digital, more convenient, more fashionable and more appealing to higher-income consumers—while retaining its historic value shopper.

That is a very difficult brand architecture.

The latest results make the issue harder to ignore.

Walmart's second-quarter U.S. comparable sales increased just 2.6%, its weakest comparable-sales performance in six years, even as e-commerce grew 24%.

That tells me Walmart is not facing a simple traffic problem.

It is facing a relevance and mix problem.

The retailer is gaining younger and wealthier consumers while losing significant spending from some of its historic customers.

That is not necessarily bad.

But if Walmart simply keeps replacing yesterday's customers with tomorrow's customers, it must continually reinvent the reason both groups should choose Walmart.

And that is where being stuck in the middle becomes dangerous.

 

Three Insights From the Grocerant Guru®

1. Stop Managing the Middle—Own a Mission

The future isn't about being everything to everybody.

ALDI owns value simplicity.

WinCo owns low-price shopping.

Lidl owns curated value plus discovery.

Winn-Dixie is attempting to own neighborhood value and service.

Walmart needs to determine what it uniquely owns in the consumer's mind beyond "low prices."

Because if low price is the entire proposition, ALDI, Lidl, WinCo and increasingly sophisticated private brands will keep attacking it from below.

The answer isn't more SKUs. It's more relevance.

2. Food Is Moving From Basket Size to Meal Solutions

The old grocery metric was the basket.

The new opportunity is the meal mission.

Consumers don't wake up thinking, "I need to increase my grocery basket."

They think:

"What's for dinner?"

"What can I eat right now?"

"What can I take to work?"

"What can I feed the kids?"

"What can I make in 10 minutes?"

That is precisely where the Grocerant intersects grocery retail.

Ready-2-Eat and Heat-N-Eat fresh food can transform a commodity grocery trip into a food experience.

Walmart should not merely sell ingredients.

It should own more solutions for eating.

3. Don't Chase Customers—Create Reasons for Consumers to Choose You

This is the biggest lesson.

Walmart's Gen Z gains are encouraging.

Its higher-income gains are encouraging.

But the loss of $6.2 billion in Boomer CPG spending is not something a retailer should simply explain away because another segment grew.

The same principle applies to Kroger and Publix.

Consumers are becoming portfolio shoppers.

They will visit five or more grocery banners in a month.

The winner will not necessarily be the retailer that captures every trip.

The winner will be the retailer that captures the most important missions.

That is the difference between a store that consumers occasionally visit and a brand consumers intentionally choose.

The Grocerant Guru® bottom line:

Walmart doesn't have a traffic problem.

Kroger doesn't simply have a price problem.

Publix doesn't simply have an inflation problem.

The industry has a relevance problem.

The consumer has moved.

The question is whether the supermarket has moved with them—or is still standing in the middle, waiting for yesterday's customer to come back.

For international corporate presentations, educational forums, or keynotes contact: Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. For more information visit www.GrocerantGuru.com , www.FoodserviceSolutions.us or call    1-253-759-7869