FMI’s 77th Annual Food Industry Analysis Highlights Major Tech Investments Transforming the In-Store Experience
Despite ongoing economic pressures, inflation concerns, and supply chain challenges, the food industry is continuing to invest heavily in technology, customer experience improvements, and health-focused solutions, according to the newly released The Food Retailing Industry Speaks 2026 report from FMI – The Food Industry Association.
The annual report provides an in-depth look at the strategies, challenges, and investments shaping the future of grocery retail and food manufacturing. Findings reveal that food retailers and suppliers are adapting to a complex marketplace by prioritizing digital transformation, operational efficiency, fresh food offerings, private brands, and solutions designed to meet evolving consumer expectations.
“Consumers are increasingly sensitive to both the cost of food and the nutritional needs of their families. Our annual industry research shows a food industry responding to this challenging economic climate by innovating and improving the customer experience, while offering more healthy options to customers,” said Leslie G. Sarasin, president and CEO of FMI.
According to Steve Markenson, vice president of research and insights at FMI, retailers and suppliers are making significant investments despite narrow profit margins. These investments include improving store environments, strengthening customer service, expanding fresh food departments, supporting local products, and adopting new technologies to create smoother and more convenient shopping experiences.
Food Industry Focuses on Five Key Strategies for Future Growth
The Food Retailing Industry Speaks 2026 report identifies five major priorities guiding food industry leaders as they navigate a rapidly changing business environment.
These priorities include managing economic uncertainty, addressing consumer needs related to health and affordability, improving the overall shopping experience, using technology to drive efficiency and innovation, and building stronger business resilience.
Food retailers and suppliers are responding to shifting consumer behaviors by balancing cost pressures with investments aimed at long-term growth. Companies are increasingly focused on delivering value beyond price by improving convenience, quality, personalization, and customer engagement.
Economic Challenges Continue to Impact Food Retailers and Suppliers
The report highlights that economic conditions remained a significant concern for the food industry throughout 2025. Approximately 90% of food retailers and suppliers surveyed reported negative impacts from international trade issues and tariffs.
Inflation and economic uncertainty also influenced consumer purchasing patterns, with 82% of suppliers expressing concerns that financial pressures would affect shopper behavior. Supply chain challenges remained another major issue, impacting two-thirds of food retailers and 70% of suppliers.
Despite these pressures, the food retail sector maintained profitability, although margins remained limited. Food retail profit margins reached 2.1% in 2025, representing a slight increase from the previous year. The report also found that digital payment adoption continues to grow, with credit and debit cards accounting for 81% of all food retail sales.
Private Brands and Community Engagement Drive Consumer Value
As shoppers continue to look for affordability and quality, grocery retailers are expanding private-label offerings and developing new ways to provide value.
The report found that 76% of food retailers used private brand programs as a key strategy for differentiation in 2025. Retailers are increasingly using their own brands to provide affordable alternatives while also delivering premium-quality and health-oriented products.
Community engagement has also become a major focus, with 77% of retailers prioritizing stronger connections with local communities. Retailers are supporting shoppers through programs and initiatives that address broader definitions of value, including convenience, relevance, trust, and overall shopping experience.
Private brands are also becoming an important tool for supporting consumer wellness goals, with retailers introducing more products featuring improved nutritional benefits.
Grocery Industry Expands Health and Wellness Offerings
Consumer interest in healthier lifestyles continues to influence food industry strategies. According to U.S. Grocery Shopper Trends 2026, approximately two-thirds of shoppers believe their diets could be healthier.
Retailers and suppliers are responding by expanding access to healthier products, nutrition information, wellness services, and pharmacy-related offerings.
The Food Retailing Industry Speaks 2026 report found that 76% of food retailers prioritized nutrition, health, and wellness initiatives. Additionally, 74% focused on products featuring beneficial nutritional attributes.
Suppliers are also adapting to increased consumer demand for healthier choices. Around half of suppliers reported that changing consumer preferences toward wellness represent a positive opportunity for their businesses. Meanwhile, 76% of suppliers focused on developing products with health and wellness benefits, and 67% reported success from these efforts.
Omnichannel Shopping Becomes Essential for Grocery Retail
Technology-driven shopping experiences have become a standard expectation among consumers. The report found that 80% of food retailers now offer online shopping, compared with approximately 50% before the COVID-19 pandemic.
Consumer behavior has also shifted toward a hybrid shopping model, with 94% of shoppers purchasing groceries through both online and in-store channels during 2025.
Retailers are investing in seamless omnichannel experiences that connect digital and physical shopping environments. Many companies are improving mobile ordering, pickup options, delivery services, and personalized shopping features.
The report found that 67% of food retailers provide curbside pickup, while 58% offer home delivery services. Additionally, 82% of retailers surveyed are experimenting with in-store technologies designed to improve customer experiences.
Stores are also increasing investment in fresh and perimeter departments, recognizing that consumers continue to value high-quality produce, prepared foods, bakery items, and other fresh offerings.
Artificial Intelligence and Technology Investments Accelerate
Technology continues to reshape food retail operations, with artificial intelligence emerging as an important tool for improving efficiency and decision-making.
Food retailers are implementing AI solutions for areas such as product assortment planning, inventory management, and loss prevention. Suppliers are also increasing their technology investments to strengthen operations and improve business performance.
According to the report, suppliers currently allocate a larger share of sales toward technology investments, spending approximately 3.3% compared with 1.9% among food retailers.
The majority of suppliers, 83%, expect their technology investments to increase in 2026, while 60% anticipate these investments will positively influence their bottom lines.
Food Industry Builds a More Innovative Future
The Food Retailing Industry Speaks 2026 report demonstrates that retailers and suppliers are actively transforming their businesses despite economic uncertainty. From artificial intelligence and digital commerce to healthier product development and improved customer experiences, the food industry is investing in solutions designed to meet changing consumer expectations.
The report’s findings are based on survey responses from U.S. and Canadian food retailers, wholesalers, and suppliers collected in February 2026. A total of 70 food retail and wholesale companies participated, representing more than 42,000 stores when combined with additional information from public company SEC 10K filings.
As consumer priorities continue to evolve, the food industry is positioning technology, innovation, and customer-focused strategies as critical drivers of future growth.
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