Forecasting and replenishment: How hypermarket Kaufland nailed it
Learn how a German hypermarket chain uses SAP's Unified Demand Forecasting solution to improve efficiency and accuracy.
Five years after COVID upended everyday grocery shopping, nothing’s gotten any easier for grocers. Inflation-weary consumers, tariffs, and growing competition factor into the top grocery retail trends 2025.
Any hope for a semblance of a return to normal after the pandemic chaos was quickly dashed by rising prices that had consumers cutting back on spending and searching for deals. While there were signs of prices stabilizing last year, meat prices continue to climb and the bird flu (and potentially other causes) drove up egg prices and led to shortages.
Now, tariffs on Mexico and Canada and a global trade war threaten to raise more food prices and destabilize grocery supply chains. The US relies on Mexico for many vegetables and fruit while Canada is a top supplier of meats and grains.
Rising prices are taking their toll on consumers. In February, consumer confidence registered its largest monthly decline since August 2021, according to The Conference Board.
5 grocery retail trends to watch in 2025
All the economic volatility only adds more pressure on traditional grocers to rethink business models and adapt to shifting market conditions and consumer preferences.
In 2023, retail and food service sales topped $8 trillion dollars in the US, according to Statista, which expects the market to see steady growth.
Coresight Research predicted that the US grocery retail market will see positive growth in 2025 with online food and beverage sales softening as grocery e-commerce matures.
Traditional supermarkets face steep competition not only from Walmart, Amazon, and warehouse clubs like Costco, but also speciality chains, dollar stores, direct-to-consumer brands, and even restaurants.
An industry that’s already undergone massive change will have to do more in order to drive growth by aligning with five top trends:
- Focus on fresh food
- Omnichannel grocery
- Improving the in-store experience
- More private labels
- Health + wellness
1. Playing on grocery strengths: Fresh food focus
Despite all the change in the industry, grocers’ strength in fresh food like produce, meat, and seafood remains a constant, and one they should capitalize on, according to Deloitte.
Even as inflation persists, consumers value fresh food, with nine in 10 saying it makes them happy, Deloitte’s survey found. Consumers view fresh food as healthy.
More than half of the grocery retail executives surveyed said fresh food, especially produce, deli, and meat, will be their most important department for the next three years.
Grocers can drive growth by offering consumers ways to buy fresh food conveniently, Deloitte advised, suggesting packaging and meal planning as a couple ways to do that.
On the backend, grocers should focus on optimizing their supply chains for the fresh food trend, according to a report by Incisiv, SAP, and NTT DATA. Advanced systems such as real-time inventory tracking, shelf-life monitoring, and automated replenishment can help prioritize freshness and drive efficiency.
By improving their supply chain with AI, predictive analytics and precise inventory, grocers also can reduce food waste. The US throws out more food than any other country—an estimated 60 million tons every year.
2. Beyond brick and mortar: Omnichannel grocery retail trend
One pandemic-driven retail trend that’s stuck around is online grocery shopping. Consumers today expect digital shopping and delivery options.
In January, US online grocery sales reached $10 billion, a 16.6% jump from the previous January, a Brick Meets Click survey found. Delivery—specifically by Walmart—led the growth.
Online grocery sales could account for more than 12% of total grocery sales in the US by the end of 2028, the firm estimates.
While online grocery is popular, it’s an unprofitable channel for grocers because it requires more labor, according to a Harvard Business Review report.
Grocery retailers should approach the problem by either doubling down on the in-store model like Trader Joe’s, charge online customers more, or build top-notch fulfillment capabilities like Walmart, the authors advise.
Retailers can boost the efficiency and profitability of online grocery with integrated systems and standardized processes, including intelligent labor deployment and order management.
Modern order management software gives retailers the ability to connect multiple sales channels to fulfilment systems to improve order accuracy and inventory management.
Make or break online shopping experiences: Composable order management
Retailers need flexibility to simplify the backend complexity of omnichannel fulfillment. Composable order management provides that.
3. Improving the in-store experience
Above all, consumers want convenience when they shop for groceries. Deloitte’s survey found that their top in-store priority for convenience is faster checkouts. Nearly 73% of survey respondents supported that while 86% of the executives polled agreed.
Grocers have been using automation to make it easier and faster for shoppers to checkout, but with mixed results. Self-checkout kiosks can be prone to technical glitches that frustrate customers and also make it easier for people to shoplift.
While some retailers have pulled back on the technology, others are pushing ahead with the trend in 2025. By 2029, self-checkout terminals will reach an estimated 2 million globally.
Sam’s Club’s Scan & Go service helped it win top customer satisfaction scores. The company also has launched plans to use AI and computer-vision technology to scan customer receipts instead of having store employees check them at exit.
Faster checkout is just one way grocers can improve the in-store experience. Rethink store layouts to make it easier for customers to find products. Data-driven merchandising ensures the right stock selection for local preferences and space efficiency.
Food tastings, cooking classes, and community events can generate excitement that customers are eager to share on TikTok or Instagram. And of course, having enough employees available to help customers will go a long way towards building loyalty.
4. Private label trend remains on growth track in 2025
Budget-conscious consumers love private labels, and with food prices remaining high, this trend will continue to grow.
Consumers say they’re buying more private-label products than in 2023 and 80% consider the products just as good if not better than name brands, according to an eMarketer report.
More than 90% of respondents to a 2024 Food Industry Association survey said they plan to increase private brand investments and 80% said private brands are are performing well in delivering on value/price to drive sales.
The Kroger Co. is among those driving sales with private label products, and views its Our Brands line as a key differentiator. Last year, the Cincinnati-based retailer launched more than 900 new private brand products, including its Field & Vine regionally grown berries. Kroger’s Our Brands line now counts 13,000 products and generates $30 billion in revenue annually, according to Food Business News.
As the Incisiv-SAP report noted, “store brands have evolved from budget alternatives to cult favorites.” Signature items not only improve margins, but boost customer loyalty.
With advanced analytics solutions, retailers can combine local preferences with space utilization to create an optimal balance of national brands and private label products across store clusters, the report said.
Self-checkout at the grocery store: Reality bites
Self-checkout machines are everywhere, but can be frustrating for shoppers and a shoplifting nightmare for retailers.
5. Grocery retailers lean into healthy food trend
Health and wellness became a priority for grocery shoppers during the pandemic, and retailers have paid attention by stocking more healthy foods and beverages. In 2025, they’ll continue to ramp up their healthy food options as consumers inspect labels for sugar and salt and buy more organic, locally sourced food.
Seventy-two percent of grocery shoppers identify themselves as health conscious, according to Progressive Grocer’s 76th Consumer Expenditures Study, based on a survey of 1,000 US shoppers in January.
The health and wellness trend dovetails with consumer demand for fresh foods. A Nielsen study cited increased demand for fruits, vegetables, and minimally processed foods.
Beyond optimizing their fresh food stock with analytics and local sourcing networks, grocers can attract health-minded consumers by offering cooking classes, recipes, and meal planning.
Deloitte’s study found that 53% of consumers cite meal planning as a pain point while Progressive Grocer’s survey found that almost a quarter of Gen Z shoppers find value in healthy cooking classes.
AI can help grocers track purchase patterns and use that data to help guide customers on their wellness journey and drive deeper engagement.
Keeping up and moving forward
To date, grocery retailers appear to be doing a good job at keeping up with industry trends and changing customer needs. Customer satisfaction among supermarkets surged 4% last year and remained steady in the latest survey, according to the American Customer Satisfaction Index Retail and Consumer Shipping Study 2025.
But with tariffs and trade wars causing so much uncertainty, grocers will have to work hard to keep customers happy. Flexibility will be key. Cloud-based technologies, automation, and AI can help provide them with the operational agility needed to manage whatever comes their way.
