Trendspotting: Traditional grocery stores holding ground against fierce competition
Trendspotting: Traditional grocery stores holding ground against fierce competition
From farmers markets to bodegas, consumers will shop anywhere and everywhere to get the exact item they want. This has made life increasingly difficult — and uncertain — for traditional brick-and-mortar grocery stores. Rising prices and declining consumer confidence aren’t helping.
Despite these challenges the grocery sector has shown resilience, with consistent year-over-year growth in foot traffic, according to the Placer.ai report, Grocery in 2025: Visitation trends and Consumer Behavior. The growth is encouraging and indicates a strong underlying demand for grocery shopping.
The shopping trends are interesting as consumers are making more frequent grocery trips but spending less time in stores reflecting a shift toward shorter, more-efficient shopping experiences. This trend suggests a need for grocery operators to adapt their store layouts, such as optimizing layouts and promoting grab-and-go areas for a more efficient quick-trip experience.
The diverseness within the grocery segment is real. Traditional grocery chains still dominate but face competition from value and fresh-format stores. This shift indicates changing consumer preferences.
Traditional grocery chains still command over 70 percent of total grocery store foot traffic, yet value grocery chains have increased their visit share from 14.8 percent in Q1 2022 to 16.6 percent in Q1 2025. Fresh-format grocery stores are also gaining traction, particularly among remote workers seeking convenient lunch options.
Visit share data within the report also shows that despite fierce competition from discount and dollar stores, wholesalers and general mass retailers, the grocery segment has steadfastly preserved its share of the overall food-at-home visit pie.
Between Q1 2019 and Q1 2025, wholesale clubs and discount and dollar stores increased their share of total food-at-home visits, gains that have come primarily at the expense of Walmart and Target. Meanwhile, grocery outlets have held firm — despite some fluctuations over the years, their Q1 2019 visit share remained essentially unchanged in Q1 2025.
The aforementioned fresh-format stores, along with ethnic-focused grocery stores, are emerging as significant players in the market, reflecting changing consumer interests and demographics. This trend presents opportunities for expansion and targeted offerings, according to the report.
Smaller grocery store formats are also doing well, outperforming larger stores, indicating a consumer preference for convenience and quick shopping trips. This trend suggests a potential shift in grocery retail strategies. Smaller grocery locations (under 30,000 square feet) saw a 3.2 percent year-over-year increase in visits in Q1 2025. Shorter trips to smaller stores align with decreasing dwell times, as consumers prefer quick errands.
The big takeaway: Even as consumers flock to alternative food purveyors in search of lower prices, grocery stores aren’t losing ground — and on a nationwide level, they remain the biggest player by far in the food-at-home shopping space.
