The average U.S. food retailer runs on a net profit margin of about 2.1 percent, according to FMI, and independent grocers average 1.9 percent. At Groceryshop 2026 in Las Vegas, Brendan Witcher, global VP of product and content at Shoptalk and Groceryshop, presented Groceryshop’s Grocery Industry Outlook, “Hot Items on Today’s Grocery List,” and argued that margins this thin leave no room for guesswork as GLP-1s, retail media and AI reshape the industry.
“That 2 percent is why those in the grocery industry must be smarter and more purposeful about the decisions they make than the average retailer,” said Witcher. “Grocery’s next competitive advantage won’t come from any single technology or trend. It will come from how effectively retailers connect them.”
Planning for GLP-1s and cost-conscious shoppers
Witcher urged grocers and brands to plan for a greater GLP-1 impact. According to a June 2026 study by PwC, GLP-1 adoption has more than doubled in 16 months. Users now live in 21 percent of U.S. households, up from 9 percent, and 54 percent have been taking the drugs for more than a year.
In households with at least one user, grocery spending falls 5.3 percent within six months and 8.2 percent in higher-income homes, according to the American Marketing Association’s Journal of Marketing Research.
Yet the Shoptalk 2026 Grocery Pulse Survey found 17 percent of grocery executives expect GLP-1s to cut top-line sales by 5-10 percent during the next five years, and just 2 percent expect a bigger hit. With 72 percent of U.S. adults overweight and 40.2 percent classed as obese, Witcher warned that the impact could be far greater than the industry expects.
“Brands are already starting to market to GLP-1 users on their packaging, and Walmart is advertising in its stores that it’s the source for ‘all your GLP-1 needs,'” said Witcher. “Retailers with pharmacy services, like Walmart, Albertsons and CVS, may have an advantage.”
Witcher also challenged grocers and brands to plan for cost-conscious shoppers. Eighty percent of Americans are trying to cut spending, and 28 percent are cutting back on groceries, according to Bain & Company. Of those, 49 percent are buying fewer items, 56 percent are trading down to cheaper brands and 44 percent are leaning harder on discounts.
“Retail media gives grocers a way to respond to each of those behaviors,” said Witcher. “You can suggest higher-margin items to protect profit, lower-priced brands to keep the number of items in each trip up, and discounted items to protect the average order value.”
According to the Shoptalk survey, 58 percent of brand executives expect placement on grocers’ websites, apps and in-store displays to matter much more in the next one to five years.
Preparing store teams for AI
On AI, grocery leaders are more positive than most Americans. Sixty-four percent of Americans worry AI will displace jobs, according to Anthropic. But the Shoptalk survey found 85 percent of grocery executives expect store associates to become customer advisors, product specialists or experience managers as AI removes or reduces their tasks. Ninety-two percent say AI-enabled mobile devices for associates are important, rising to 97 percent among grocers.
“Employees will evolve into shopper experience specialists,” said Witcher. “That means grocers and brands will need to rethink, reprioritize and retrain for how employees interact with shoppers, helping them find and compare products, understand ingredients and discover new products they haven’t tried before. Shoppers already use their phones to look up product information and reviews and to load coupons. Associates should have those same tools if grocers want to meet shoppers’ expectations for service.”
The Shoptalk Grocery Pulse Survey was fielded July 29–Aug. 5 among 88 respondents at the director level and above: 39 from grocery retailers and 49 from brands.
Groceryshop, a Hyve Group event, brings together retailers, brands, technology providers, investors and startups across grocery, mass, club, drug, dollar, convenience, pharmacy and CPG. The event draws more than 4,000 leaders from more than 50 countries.