The grocery industry is moving at a faster pace in 2025 than ever before! We’ve decided to hit the pause button for a second and put together the top trends we’re seeing shape the way retailers operate, engage with customers, and manage their supply chains. Take a look!
The Impact of Tariffs and Pending Tariffs
Tariffs on imported goods have become a hot topic for the grocery industry, as they could significantly impact grocery prices depending on which way events turn. According to the U.S. International Trade Commission, tariffs on items like berries, cut flowers, and certain vegetables may lead to higher costs for retailers and consumers alike. A recent article in Supermarket Perimeter reports that the tariffs could cause nearly two-thirds of produce sold in the U.S. to face a 25% price hike!
While the recent halt on tariffs on Mexico and Canada have many breathing a sigh of relief, the potential for a sudden increase in the cost of foods from those countries is posing a sharp challenge to grocers, according to a recent article in Grocery Dive. The uncertainty has already led to price shifts and even some panic buying. To mitigate the current instability, retailers may need to focus on sourcing more products domestically or renegotiating supplier contracts. Creative merchandising strategies, such as promoting seasonal and locally grown items, can also help offset price variability.
The Rise of Value Shopping
In addition to pending tariffs, CSUN reports that consumers are still feeling the pinch from inflation. Many households remain financially strained, prompting a heightened focus on cost-savings. This shift continues to reshape consumer behavior, with shoppers increasingly prioritizing affordability, discounts, and value-added offerings over brand loyalty or premium products.
Traditional grocery retailers are facing intensified competition from value-focused giants like Walmart, Amazon, and Costco, according to a Wall Street Journal article. These retailers have capitalized on the demand for affordability by offering competitive pricing and subscription-based savings like Amazon Prime and Walmart+. Similarly, Costco’s membership model continues to attract shoppers seeking products at wholesale prices. Even chains like Dollar General and Dollar Tree have expanded their grocery sections, as covered by NPR, attracting budget-conscious shoppers with low prices and convenient locations.
Growth of Store Brands
To combat competition from value stores, traditional grocers can focus on building their store brands. A report by Circana shows that store label brands are projected to see significant growth, with sales increasing by 10% annually as consumers seek affordable alternatives to national brands. Retailers like Kroger, Aldi, and Trader Joe’s, known for their exclusive product lines, have gained market share by offering high-quality items at lower prices.
Store brand demand has been driven by shifting demographic trends, as well as the growing consumer emphasis on value-driven shopping. According to NIQ’s Mid-Year Consumer Outlook: Guide to 2025 report, 50% of global respondents are now purchasing more store brand products than ever before, signaling a significant shift in shopping behaviors. By understanding the motivations behind this consumer shift—whether it’s cost savings, quality perceptions, or convenience—brands can better position themselves to meet evolving demands and retain their market share.
Electronic Shelf Labels Go Mainstream
With so much focus on price adjustments and optimization, Electronic Shelf Labels (ESLs) are set to achieve mainstream adoption in 2025. According to a report by Research and Markets, the global ESL market is expected to grow at a compound annual growth rate (CAGR) of 22.5% from 2021 to 2028, driven by the increasing demand for automation in retail. This technology not only streamlines operations but also cuts labor time and empowers retailers to make data-driven decisions, ultimately boosting both customer satisfaction and operational efficiency.
Digital price tags enable real-time updates to pricing data, ensuring that promotions and price changes are instantly reflected on the shelf, which enhances the customer experience and reduces pricing errors. Beyond pricing, ESLs play a crucial role in inventory management by providing retailers with up-to-the-minute data on stock levels, helping to minimize out-of-stock situations and improve shelf availability. By integrating out-of-stock tracking, ESLs allow stores to quickly identify and address gaps, ensuring customers find what they need while optimizing restocking processes.
Growth of Online Sales and AI Adoption
Online sales grew five times the rate of in-store sales in 2024, and that trend is expected to continue, as reported by Brick Meets Click. A hybrid model—where customers shop both online and in-store—will dominate in 2025. According to research by PYMNTS, 62% of shoppers cite convenience as a reason for choosing digital channels to purchase their groceries. To attract hybrid shoppers, an article in Grocery Dive suggests that grocers should prioritize creating strong, memorable omnichannel experiences centered around convenience, speed, and consistency.
In addition, consumer-facing AI will grow to manage a broad range of tasks including driving up personalization for online, in-store, and hybrid shoppers (particularly as it relates to retailer loyalty programs), assisting with category management, bolstering retail media operations, and forecasting when fresh produce will be in stock. A McKinsey report predicts that the growth of automation and AI will reduce operational costs by up to 30% in the grocery sector.
Focus on Sustainability and Health
Finally, shoppers are increasingly demanding eco-friendly practices from their grocery stores. According to a recent article in Progressive Grocer, consumers are reimagining their relationship with their food, pushing retailers to innovate beyond the traditional shopping experiences. In addition, health-conscious consumers are driving demand for fresh, organic, and locally sourced products. A report by Deloitte highlights that 55% of consumers are prioritizing healthier food choices.
However, NIQ data reveals a significant hurdle: 26% of consumers find it difficult to locate eco-friendly products online. To bridge this gap, brands and retailers must rethink how they showcase sustainable options, ensuring attributes are prominently displayed on shelving and packaging. To keep up with this trend, grocery stores should emphasize their commitment to health and wellness by highlighting nutritional benefits, organic certifications, and farm-to-table stories in a way that connects with consumers and builds brand loyalty, thereby making it simpler for shoppers to find and make planet-friendly choices while maximizing the visibility and appeal of their products.
Succeeding in 2025 and Beyond
At Carlson AirFlo, we’re committed to helping you navigate the fast changes in the grocery industry with cutting-edge strategies and innovative solutions. Our expertise lies in designing dynamic merchandising systems and displays that keep pace with the latest trends, ensuring your store stays ahead of the curve. Whether you’re looking to enhance your sustainability efforts, integrate new technologies, or optimize your store layout, we’re always here to help you keep it fresh. Contact us today to get started!