With American shoppers spending less on groceries, supermarket chains have a decision to make: Adapt to the new generation of shoppers or risk losing them.
Grocery stores could lose up to 15 percent of shoppers if they don’t adapt to preferences of Gen Z and millennials, areport this month from global consulting firm, AlixPartners, found.
“[Grocers] need to become multispecialists, solid across the board but absolutely compelling in a few disciplines narrow enough to master,” AlixPartners managing director Matt Hamory said. “Fresh is too broad; prepared meals for young families, for example, meet a clearly defined need for a desirable consumer group.”
Younger shoppers rely on prepared foods, focus on pricing and shop online more than their Gen X and baby boomer parents.
Overall, 61 percent of young parents buy groceries online compared to 27 percent of older generations, the study said. Nearly half (48 percent) buy prepared foods at least once a week, compared to 21 percent of older generations.
When broken down by region, Gen Z are 17 percent more likely to shop at club stores in the Midwest than other generations, and 15 percent more likely to shop online in the West.
Adapting to this new generation of shoppers has become a do-or-die situation for grocery stores.
Grocers are already facing an industry-wide slowdown. Year-on-year volume – meaning how many items customers buy – dropped for five consecutive months from February to June. It’s the first time that’s happened in more than a year, according to a study last month from consulting firm Bain & Company.
Three factors have caused the slowdown, Bain found. A drastic drop in spending on Supplemental Nutrition Assistance Program, also known as food stamps, in late 2025; gas prices squeezing spending in other areas; and the cost of groceries going up by a third since pre-pandemic.
Customers have responded not only by spending less – 80 percent report cutting back – but also by not buying as many items. Some 49 percent say they are buying fewer groceries because of financial pressures, Bain found in a separate study.
Grocers have responded to these concerning trends by trying to build loyalty from shoppers. Not every grocer can be the cheapest, and Bain’s research shows they don’t have to be to win.
The edge goes to those that price strategically and look for other avenues to build loyalty with customers watching every dollar they spend.
