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Food retailers and suppliers are investing in technology for worker recruiting, training, retention, and pay increases to ease labor issues.

Innovation, technology will drive grocery industry into the future

New FMI analysis shows inflation, workforce, and supply chain issues persist


  • 44% of food retailers and 32% of suppliers believe supply chain disruptions will negatively impact their businesses in 2023
  • More than 90% of companies are providing increased wages and salaries to full-time employees
  • Nearly 70% of food retailers are showcasing private brand programs as high-quality value alternatives and 65% are emphasizing price differentiation such as EDLP (everyday low pricing) and high-low pricing

Food retailers and suppliers are prioritizing innovation to invest in more creative and proactive approaches in order to thrive in the future, according to a new analysis by FMI—The Food Industry Association.

The 74th annual report said that formidable challenges with changing workforce, inflation, supply chain hurdles, intense competition, and shifting consumer buying habits continue to impact the food industry. 

More specifically, food retailers and suppliers are investing in technology for worker recruiting, training,  retention, and pay increases to ease labor issues. They are prioritizing competitive pricing and strategies to provide value and maintain customer loyalty, as well as fostering redundancies across product supply and assortments. 

“The positive news is the industry is signaling its expectation that supply chain disruptions will continue to lessen as we move through 2023. Across the food supply chain, we are taking the lessons learned over the past few years to change the way we invest in our employees, innovate to future-proof our businesses, and, most importantly, adapt our operations to better engage with and serve shoppers,” said FMI President and CEO Leslie Sarasin. 

Less than half of food retailers (44%) and 32% of suppliers believe supply chain disruptions will negatively impact their businesses this year, compared to 70% of food retailers and 83% of suppliers in 2022, according to the report. 

In order to combat inflation while maintaining customer loyalty retailers are focusing on competitive pricing for products and categories to emphasize value for shoppers. The majority of retailers say they are showcasing private brands as strong value alternatives, and 85% of retailers are investing in new technologies to improve the customer experience. 

In 2022, food retailers spent an average of $13 billion on technology investments, and food suppliers spent almost twice as much on technology as food retailers.

In addition, the report said that retailers are leveraging perimeter departments to attract and retain shoppers. Food retailers differentiate themselves from the competition by selling local assortments throughout the store (88%), increasing local items in SKU allocation (73%), and utilizing fresh prepared/foodservice programs to enhance consumer engagement (85%). 

The report also highlights 10 key takeaways, including:

  1. Inflation sparks value initiatives like enhancing price/value messaging across a variety of marketing channels
  2. Strengthening the industry workforce by focusing on strategies to boost recruiting hiring and retention 
  3. Strategies to boost customer engagement emphasizing product innovation, including new item introductions
  4. Acceleration of fresh foods with increased efforts to increase allocation such as fresh-prepared grab-and-go options
  5. New efforts to address supply hurdles like collaborating with trading partners for a more effective strategy 
  6. Technology to support a range of needs from operations to customer experience 
  7. Retailers are fine-tuning ecommerce strategies ranging from fulfillment to platforms 
  8. Managing costs to enhance results by doing things like strategically reducing expenses 
  9. Driving improved in-store experiences by taking innovative approaches to store development and increasing local SKU allocation
  10. Prioritizing charitable contribution, diversity, and waste reduction with quantifiable goals and implementation time frames


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