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July 14, 2025
Are Traditional Supermarkets Losing Ground With Younger Generations?
When considering their most recent visit, among silent generation and boomer consumers, supermarkets register as the top destination for food shopping, according to a recent study from The Feedback Group. However, Gen Zers, millennials, and Gen Xers prefer other retailers, including Walmart, Aldi, dollar stores, and club stores.
Walmart was the top choice for younger consumers as more than a fifth of Gen Zers, millennials and Gen Xers in the poll taken this spring indicated they recently shopped for groceries there.
Supermarkets Appear To Be Losing Ground With Younger Americans
Notably, supermarkets slipped from the second-most shopped format among millennials and Gen X in 2024 to near the bottom in 2025.
Among Gen Zers, 22% indicated they had shopped at Aldi on their last grocer shopping trip, the same as Walmart. Only 8% of Gen Z shoppers, 11% of millennials, and 14% of Gen Xers said their most recent grocery shopping trip was to a supermarket.
“A generational reshuffling is underway, with younger shoppers gravitating more toward other food formats, leaving supermarkets to reevaluate how they engage this critical audience to remain relevant,” said Brian Numainville, principal at The Feedback Group and RetailWire BrainTrust panelist, in a statement.
Any shifts away from supermarkets come as consumers across age groups have been trading down due to inflation.
Analysis by Bank of America in spring 2024 found Gen Xers and boomers were already value shopping prior to the pandemic. However, zoomers and millennials began increasing their share of grocery spending at value-tier stores in fall 2023 amid persistent inflationary pressure. Bank of America attributed the shift to “life stage changes” as younger consumers prioritized spending on necessities such as vehicles, housing, and insurance while seeking grocery savings.
Premium Private Label CPG Could See Growth via Gen Z, Millennial Spending
Elevated prices are also driving growth in store brands and a just-released Numerator’s study found Gen Z and millennials “leading the charge into premium private label,” including in grocery.
The Numerator study found aspirational yet accessible brands such as Trader Joe’s, Costco’s Kirkland, and Walmart’s Bettergoods range appealing to the two younger generations. Numerator said, “They reflect a desire to buy products that align with both budget constraints and personal values, echoing the post-2008 mindset that once defined Millennials.”
Nonetheless, McKinsey’s “The State of Grocery in North America 2023” survey found 49% of Gen Zers and 48% of millennials willing to pay more for environmentally-friendly product (i.e., zero pollution, recycled materials or minimized packaging) versus 28% of all respondents.
Similarly, a YouGov survey of Gen Z members for Whole Foods conducted last fall revealed 70% are willing to pay more for “high-quality food,” and over half prefer brands that prioritize lower environmental impacts or locally sourced foods.
ICSC’s “The Rise of the Gen Z Consumer” study found the top priorities for Gen Zers in their shopping experience to be quick and easy checkout, cited by 46%; followed closely by fast shipping (45%, and being able to get what they want in-store immediately (39%).
Given their digital savviness, zoomers and millennials are also found to be more likely to shop online for groceries and to be driving the trend toward food discovery via social media. A recent survey of 5,000 U.S. adults commissioned by McCain found 77 % of consumers now make mealtime decisions based on what’s trending online.
Finally, a Wall Street Journal article from 2023 concluded that traditional supermarkets have to find a point of differentiation or they’ll continue to lose ground to more price-driven competitors.
Discussion Questions
What may be causing Gen Zers and millennials to shift their spending away from traditional grocers?
Where’s the opportunity for traditional supermarkets to reposition themselves to better compete for Gen Zers’ and millennials’ grocery dollars?
Poll
Loading …BrainTrust
Patricia Vekich Waldron
Contributing Editor, RetailWire; Founder and CEO, Vision First
Oliver Guy
Global Industry Architect, Microsoft Retail
Scott Benedict
Founder & CEO, Benedict Enterprises LLC
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Traditional grocers in the US are, by and large, not that great. The store designs are poor, they focus on volume rather than anything innovative, pricing is mediocre. What once worked for past generations doesn’t satisfy younger consumers. They’re migrating to more interesting and directional food formats: Aldi for low prices and quality, Trader Joes for innovative convenience, Sprouts for quality, and so forth. This is facilitated by a change in shopping habits with a focus on smaller, more regular trips as opposed to one big weekly food shop.
The question ia a little vague as to what it’s getting at: i.e. are we talking about “tradtional supermarkets” in the sense of the players, or more in the sense of the format. For the former I would say yes…at least a little; but of course the players have changed dramatically over time (indeed change in this regard has been such a constant it seems like an idle question). So maybe a more meaningful interpretation would be “is what defines ‘supermarket’ losing ground?” Here I lean more towards a “no”. Physically stores have expanded, and the industry has consolidated (these trends, too are age-old); as noted, off price has grown (but even this is an old, old concept: the term “supermarket” dates to Depression era economy stores). Perhaps the real inference is that online will make much greater inroads than currently; here, I’ll stick with the same (hard) “no” I give every time the question is raised. Online will grow, but not to the extent enthusiasts expect.
Don’t forget the rise of the one-person family. Many people working full-time can’t afford to marry or purchase a home, and they may eat by themselves. Traditional meal packaging won’t work for them. Millennials will come back to grocery stores if their particular needs are met.
The pack size problem is real!
That can be offset by singles who pack food for the office (up to 5x/wk), or WFH eating more meals at home. I’m not sure how the house or marriage costs works into food market choice… unless in a real small town (few options) or no transport.
Walmart did try to cut corners by offering less items to ship to home… but still an option for large categories of non perishables.
Not so much a generational change, as big box Walmart has found their best offering …FOOD What actually is a “grocery store”? (like defining a “dept store”).
If it works, do consumer really care what the industry calls it.
I personally hope people in the USA get better at cooking & shop healthier, with less reliance on “single serve”… a) horrible for the environment, b) single serve is completely at odds with shrinkflation (producer)/ supersizing (consumer) battle c) food packaging maybe a contributor to the USA rise in colorectal cancers (ever since explosion of microwave containers that leech plastics)
Lastly, for the most cash strapped, they will be forced to move back with family or have roommates… packaging in small units is usually least cost efficient.
I do 1x/mo run to Walmart (primarily frozen foods & family size). The store size of Walmart, however means they are further away from city centers.
Target’s missed opportunity: not effectively putting fresh food in their smaller stores! Would be closer option!
It’s a question asked of every generation – are they still going to cook as many meals as their parents did? The answer is always no, and the shift towards convenience and outsourcing of food prep will continue as it has. For those who still do cook, it is likely only those with large families who will continue to shop at traditional grocery stores or warehouse clubs. Meal prep kits for the time-constrained chef and Whole Foods for the wealthy chef (or Trader Joe’s for the upper-middle class chef) will fill in the gaps in the meantime.
Based on the economic direction of the USA, which is likely to take precedence… “time-constrained” or money constrained?
As the rich get richer & poor get poorer… more of a question what the wealthy will do.
Keep dipping their toe into Walmart?… or go back to convenience (delivery)? Bespoke (personal chefs & personalized delivery)? Or, keep the restaurant industry from going under?
I can see “large families” being on the cost conscious side… and doing the standard mix of Walmart and local for the more fresh needs (milk, fruits). Or CostCo/club stores for ongoing volume.
When only 8% of Gen Z’s last grocery trip was to a supermarket, that’s not a trend; that’s a structural breakdown calling for painful transformation. Traditional supermarkets are caught in a classic “innovator’s dilemma” – they remain structurally committed to legacy formats optimized for yesterday’s consumer while younger generations have developed entirely different shopping frameworks.
Price, the perennial lever, isn’t the primary driver. If that were the case, discount chains would win everything. Instead, we see Trader Joe’s thriving with premium private label by solving the “values-price-convenience” triangle that traditional grocers ignored.
To transform, traditional supermarkets need to recognize that grocery shopping has become a lifestyle expression, not just pantry-filling. This shift is amplified by changing shopping patterns – younger consumers favor smaller, more frequent trips over the traditional weekly mega-shop, fundamentally challenging the supermarket’s scale-based model.
What options do they have? 1) Create hyper-local relevance by partnering with local producers, offering neighborhood-specific assortments, or becoming the community food hub. This is more than “local sourcing,” it’s about becoming indispensable to the local food culture. 2) Transform the shopping journey into content creation. Gen Z discovers food through social media anyway – make your store the backdrop for their content, not just the transaction point. 3) Pivot to micro-format innovation. Single-person households need different pack sizes, meal solutions, and shopping frequencies. The traditional “family of four” format is increasingly obsolete when shopping behavior has shifted from bulk provisioning to frequent, targeted missions.
Unless they want to follow the path of department stores, traditional grocers must shift their strategic focus from operational efficiency to a structural retooling to meet how consumers define value today.
WalMart and Aldi aren’t supermarkets…then what are they? (yeah, sure the, former has a [discount] department store added on, but there’s absolutely nothing about the grocery section of WM that doesn’t scream “supermarket!”). Tom’s post makes sense only if we define “supermarket” in an unreasonably narrow sense, predicated on who operates it, rather than what it is.
“In fiscal year 2025, nearly 60% of Walmart’s U.S. revenue came from food sales. The grocery segment accounted for $276 billion of Walmart U.S.’s $462 billion in total net sales” (Retaildive).
The pandemic (delivery, distance, outages, 1 stop vs multi) may have tipped the scales towards Walmart. But revenue shows most people do not have a problem with Walmart being labelled a “food” store.
Once cooked & on the plate… does the name of the store (Kroger vs Aldi) matter?
Quality, taste & price could change opinions. Fewer stores have a stigma that the food is poor quality.
These reasons are why our share of trips has actually increased over the past year to our Twin Cities high-end grocer, Lunds&Byerly’s, as well as a 100-year-old neighborhood specialty grocer. Target supplies our weekly staples but we hit the farmers’ markets and Asian specialty stores almost as often.
Lunds is playing well-curated GenX music as well, so we appreciate the pandering.
Gen Z is probably not the best food benchmark… as half are living at home or college, and the older segment may be in the shopping habits of adults.
The age group is highly fractured… as less personal responsibility for themself or others. The ideal junk food, fast food & restaurant target… where “affordable” (whatever that means to them).
Throughout my career in retail, I’ve watched generational preferences reshape entire industries—but few shifts have been as urgent or as misunderstood as the one happening in grocery today. Traditional supermarkets, once the default destination for weekly shopping, are increasingly being bypassed by Gen Zers and millennials. The reasons are layered, but the opportunity is crystal clear: it’s time to reimagine the grocery experience for the next generation of shoppers.
Why Younger Shoppers Are Walking Away
Gen Z and millennials aren’t just “digital natives.” They’re convenience natives, values natives, and experience natives—and that changes everything about how they shop for food.
For starters, they don’t romanticize the full basket or weekly grocery trip. Instead, they lean into on-demand delivery, mobile-first ordering, and grab-and-go meals that fit their fast-moving lifestyles. Meal kits, curbside pickup, and third-party apps like Instacart offer a level of convenience that many traditional grocers simply haven’t matched yet.
Then there’s the digital experience. Younger shoppers expect more than just a functioning app—they want a personalized, intuitive, and rewarding experience. Unfortunately, many legacy grocers are still offering clunky interfaces and outdated loyalty programs that don’t resonate.
And let’s not overlook values. Gen Z and millennials are deeply intentional with their dollars. They prioritize sustainability, social responsibility, and clean ingredients—and they’re willing to walk past ten national brands to support a niche, purpose-driven product they discovered on TikTok.
The Opportunity: Meet Them Where They Are
While this shift may sound like a challenge, it’s really an invitation—for traditional grocers to evolve, adapt, and reconnect with a generation that still needs to eat but wants to do so on their own terms.
Here are six strategic pivots that I believe can help supermarkets win back the trust and spending of younger shoppers:
1. Rethink Convenience
Invest in frictionless omnichannel experiences—not just “buy online, pick up in store,” but seamless navigation, real-time inventory, and smart substitutions. Younger consumers value time more than ever. Meet them there.
2. Curate Like a Trend Spotter
Bring in emerging brands, global flavors, and snackable formats that align with lifestyle trends. Create in-store discovery zones that reflect what’s trending on social media.
3. Lead with Purpose and Transparency
Sustainability and ethics aren’t just buzzwords—they’re buying criteria. Use your platform to highlight local vendors, ethical sourcing, and packaging innovation.
4. Elevate Prepared and Fresh Offerings
For many millennials and Gen Zers, meals are increasingly assembled, not cooked. Think premium grab-and-go, chef-curated kits, and fresh, ready-to-eat options that bridge the gap between restaurant and retail.
5. Modernize Loyalty and Value Perception
Use digital tools to offer personalized savings, flexible rewards, and real-time value messaging. Private label brands can be a secret weapon—if they’re well-designed, priced right, and backed by quality.
6. Be Where They Scroll
If social media is where discovery happens, then retailers need to show up with purpose. Tell stories, share recipes, spotlight local partners, and don’t be afraid to collaborate with creators. Authenticity builds community—and community builds loyalty.
Reinventing, Not Replacing
This isn’t about abandoning the legacy of the supermarket—it’s about repositioning that legacy for a new generation. The grocers who will win the next 10 years aren’t necessarily the most high-tech, but the most attuned to the evolving preferences of today’s shopper. That means understanding not just how they shop, but why—and responding with relevance, empathy, and innovation.
As the industry continues to navigate transformation, now is the time for supermarkets to reassert their value—not as yesterday’s default, but as tomorrow’s essential.
Meet them where they are is exactly what I was thinking! This is what is driving innovation today and making people feel heard.
For years traditional supermarkets have been losing share to other formats. All cohorts – not just younger shoppers – have adopted different shopping patterns and prefer to get foodstuffs from more interesting, local, and/or better value retailers.
Not just for years, but for decades, for precisely the reasons you describe.
All shoppers continue to get more savvy.. It’s not a secret the higher priced (convenience price) of NON grocery in a “grocery store”. So if “grocery stores” can clog up aisles with non grocery/non food, of course Walmart is a grocery store.
In fact, Walmart is more pro-consumer, as they try to flatten the price (via volume) of the non grocery categories.
The digital explosion brought home delivery + price compare to an art form.
Convenience of broad based grocery does work for the elderly or those with mobility issues who enjoy their independence. In tandem with delivery (either themselves or family members shipping to them).
Shopping & choice in general has been global for decades.
Why should the majority of the US be held to the specific brands that an Albertsons or Kroger decides to put on shelves?
Maybe the food-selling retail industry needs to get out of its own way. Stop worrying about subcategories. Anyone that sells food is a competitor… and some are rising to the top as delivering (pun intended) value, variety, and freshness.
Trends shift—sometimes slowly – sometimes fast and retailers must move with their customers to maintain market share. Some brands double down on specific demographics, chasing the ‘grey pound/dollar’ or other groups. But long-term can rely on relationships built early. Anecdotally, at least, Grocery loyalty lasts many years – with customers staying with the same brand for many years. Staying relevant across generations and groups is key.
Could it be that grocers in the US consider emulating Japanese motor manufacturers who introduced specific brands with a modified value proposition aimed at younger customers?
Dare I compare traditional grocers and department stores? Could I take a picture of either from any of several prior decades and not be able to tell the difference…???
My millennial kids shop differently. One shops at Trader Joe’s, occasionally at Fresh Market, and a local butcher shop. The other, with a larger family, prefers Aldi, Target pick-up, and loads up occasionally at Costco.
Both are all about quality, value, and as Neil pointed out, store design. That’s something that has changed how I shop, too. I used to be loyal to a big chain grocer because it was easy. Now? Not so much. Given the choice, I will choose a smaller store with non-classic grocery store vibes every time.
Many younger shoppers find supermarkets slower and less convenient than other options. There’s an opportunity for grocers to improve checkout speed, product availability, store layout, and overall in-store experience to better meet the expectations of younger generations.
“supermarkets slower” can be in many way, but makes CX worse than the habitual need for food.
1) Closed: rows of check out lanes that have no employees
2) Weird self checkout hours: blocked off with tape, as it ‘after hours’ for self check out
3) So many POP displays (Faced this 2 days ago at Ralphs, a Kroger nameplate)…
Blocked access to checkout lanes, or the perpendicular walkway connecting the lanes. So bad that ADA compliance is completely in question. Worse than the last time I complained to a manager that the heavy trafficked area is unsafe. Not enough room for 2 carts to pass PLUS all the people lined up in the checkout lanes. An emergency exit disaster waiting to happen. It added a stress level, that is really bad CX.
Gen Z shoppers could be the canary in the coal mine.
On a recent supermarket visit my total at checkout dropped from $50 to $35 after all the app scanned and clipped coupons and loyalty offers were added.
On the one hand, I earned a lot of savings. On the other hand, why did I have to work so hard, open an app, clip coupons in the app and scan coupon codes on shelves?
And how much more did I pay for the other items that didn’t have an offer or digital coupon?
The winers in grocery like Walmart, Aldi and Trade Joe’s give me one, fair price. No games. No feeling ripped off.
Gen Z could be calling out fundamental flaws in high low grocery. Making shoppers work too hard to get a fair price. Or being trained to only buy the heavily app discounted items knowing that everything else is over-priced.