Survey: Grocers continue investments despite cost pressures, slim margins
Grocers and food suppliers are continuing to take steps to improve the shopping experience, even as macroeconomic conditions put strain on the industry.
According to The Food Retailing Industry Speaks 2026 report released by FMI – The Food Industry Association, 90% of responding food retailers and suppliers are reporting negative impacts from international trade and tariffs, while 82% of suppliers noted concerns that economic challenges and inflation would influence consumer shopping behavior.
Two-thirds of food retailers and 70% of suppliers pointed to negative impacts on their businesses from supply chain challenges in 2025. Roughly 11% of food retailers posted losses, and across the industry, food retail profit margins remained thin in 2025, up slightly from the prior year at 2.1%, according to the report.
Despite cost pressures, grocers are continuing to invest in stores and cater to consumers’ needs. A majority (82%) of food retailers surveyed are experimenting with in-store technologies to enhance customer experience, and grocery stores are also expanding space for fresh and perimeter departments.
[READ MORE: Survey: Grocery shoppers remain concerned prices could keep rising]
Suppliers are also increasingly focused on enhancing their technology. According to FMI’s report, they have spent a greater share of sales (3.3%) on technology than food retailers (1.9%). Most suppliers (83%) expect to increase their technology investments in 2026, while 60% of suppliers expect these investments to positively impact their bottom lines.
“The investment food retailers and suppliers are making to ensure robust grocery shopping experiences is significant,” said Steve Markenson, VP of research & insights, FMI. “Even with tight profit margins, our research finds food retailers and suppliers are investing in improved store space for key departments, customer service excellence, high-quality fresh foods and local products, as well as technology enhancements with a focus on efficient operations and frictionless grocery shopping experiences.”
Grocers are also focused on providing more value to shoppers as they remain diligent about high prices. Three-quarters (76%) of food retailers leveraged private label programs in 2025 as differentiation strategies, and 77% focused on community support and ties to attract new consumers.
The industry is also aiming to meet consumers’ health and well-being goals by improving access to products and services that support healthy living, according to the report. Three-quarters (76%) of food retailers said they focused on offering more products centered around nutrition, health and well-being, and 74% emphasized products with beneficial nutritional attributes.
The same percentage (76%) of suppliers said they focused on products with beneficial attributes for health and well-being, and 67% of those suppliers reported success.
“Consumers are increasingly sensitive to both the cost of food and the nutritional needs of their families,” said Leslie G. Sarasin, president and CEO for FMI. “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.”
FMI’s report data is drawn from a survey that was sent to U.S. and Canadian food retailers, wholesalers and suppliers in February 2026, A total of 70 food retail and wholesale companies completed the questionnaire, representing over 42,000 stores.
