Smart retail , deep learning , neural networks technology and marketing concept. Disruption … More
Every major technological shift has created winners and losers. From the rise of the internet to the smartphone boom, companies that failed to adapt faded into irrelevance.
While the technology has been around for several decades, artificial intelligence (AI) is transforming food retail from creating efficiencies at scale, reducing running costs, and streamlining many processes that exist across many business lines. Add the newer generative AI (gen AI) and agentic AI into the mix, and the potential for these transformational technologies to forever change the way grocers do business is substantial.
It is not only the scale at which the technology is transforming industries, but also the unprecedented pace. In retail, it is reinventing how people shop, how businesses operate and how employees work.
The urgency for retailers—and in particular, grocers—to adopt AI is critical. Why? Because generally, they operate with lower margins and in a highly competitive market/. Most customers are value-seekers who continuously re-evaluate their shopping strategy when walking into a store—from where to shop, to what to buy, to when they can find the lowest price.
It is clear from Accenture’s latest Pulse of Change survey that both retailer and CPG C-suite executives understand the importance of leveraging AI technology. More than eight in 10 say they are preparing to increase investment in gen AI initiatives this year, and 64% expect to be using their gen AI solutions at scale.
The survey suggests this is going to be the year when companies move from experimentation to scale. Just over half (53%) of retail and CPG C-suite executives, say their organization’s gen AI development is going faster than initially expected.
The promise of AI
There is good reason why grocery retailers are embracing AI technology. At its core is the capability of computer systems or algorithms to imitate intelligent human behaviour – and in some cases improve how to interpret large amounts of data to make decisions and solve problems.
AI in food retail holds the promise of streamlining mundane tasks, cutting food waste, boosting the customer experience and reducing operational costs.
We have already seen early use cases in areas such as inventory management and optimization, which allows grocery retailers to more efficiently predict and forecast their demand and then make sure that the inventory they keep in stock is optimized to that demand. For example, noticing that weather is getting warmer would suggest an increase for barbecue supplies, beverages, and outdoor food items to capture sales in response.
Look at how Lowe’s is improving its seasonal demand forecasting using an AI-powered solution to boost its operational agility as well as its ability to quickly and accurately respond to fluctuations in customer and market demands.
Beyond forecasting and inventory management, we’re also seeing grocers using Al for quality control, which can scan meat and vegetable products to gauge their freshness and then trigger alerts and promotional actions to sell products that are near their expiry date.
Retailers are also pairing AI with advanced analytics to anticipate trends in close to real time, dynamically adjusting curated product assortments, layouts, and pricing that enhance local relevance and customer satisfaction. You can see the groundwork for these shifts already being laid at retailers like Walmart, which is introducing electronic shelf labels which radically reduce the time needed to update pricing, increasing responsiveness.
The next frontier of gen AI
As AI continues to progress in leaps and bounds, grocery retailers now stand at the next inflection point with the rise of generative and agentic AI. This technology is transforming industries at an unprecedented pace.
Product discovery is shifting to social and emerging platforms—disrupting traditional search methods. In many ways we can expect large language models (LLMs) to become the new influencers, driving shopping decisions through recommendations. As a result, retailers will need to identify how to best link LLMs to product and brand information so that it appears as a recommendation. In a world where search is being disrupted, brands/retailers need a way to be ‘found’ by these LLMs.
In the area of ‘agentics’, where Al agents assist with complex, goal-oriented tasks with minimal human intervention—from optimizing back-office operations to resolving customer service queries or discrepancies in the supply chain—they can interact with websites, complete forms, gather and submit information and process payments.
Recently, the National Retail Federation (NRF), identified the roll-out of AI agentics as its top prediction for the sector in 2025, followed by gen AI in second, and AI’s role in integrating retailer systems, third—a clean sweep for the emerging technology.
Turning vision into reality
While staying one step ahead of AI’s seismic shift requires many grocery retailers to rethink their entire business operations. To assess where and how to get started, there are five imperatives to consider:
Start with value: Speed is of the essence, as those who move first will likely steal the march on competitors. However, to truly move the needle, grocers should move beyond isolated AI pilots and experiments, and instead, focus on enhancing business capabilities across the entire value chain. It means prioritizing AI investments based on business impact to ensure that initiatives drive real value. Only by taking a strategic, outcome-driven approach will grocers maximize return on investment and create lasting competitive advantages.
Build a secure and adaptable digital core: For AI to be effective, grocers need to establish a strong digital foundation and that means investing in the right infrastructure, including scalable cloud solutions, integrated data platforms and secure, AI-ready ecosystems. Without this foundation, AI initiatives may become fragmented, slow, or vulnerable to security threats. Retailers that manage their digital backbone strategically will enable AI to scale and evolve with the business.
Rethink talent and ways of working: AI is set to handle repetitive and transactional tasks, freeing people to focus their time and expertise toward strategy, creativity and decision making. It requires grocers to take proactive steps to upskill their workforce, redesign workflows and ultimately, create a culture where people and AI collaborate seamlessly to unlock entirely new levels of efficiency and innovation.
Implement responsible AI: As AI systems take on decision-making roles, retailers must ensure they are transparent, fair and accountable. This involves addressing algorithmic bias, complying with regulations, and creating explainable, ethical AI solutions. Responsible AI enhances customer trust, strengthens brand reputation, and delivers sustainable business value.
Embrace continuous change: Retailers should not view transformation as a singular initiative but rather integrate change and imagination into their organizational culture. This involves a continual refinement of processes, adaptation to emerging technologies, and anticipation of evolving consumer expectations. Agility and innovation will be the hallmarks of the next generation of market leaders.
The pace of change in retail has never been faster, and when it comes to AI, the timeline is a lot shorter. Within a few years, we can expect to see that most retailers are going to see their competitors adopt Al and gen Al on a large scale. Those that take bold action today will be the ones shaping the industry tomorrow.
These five imperatives are not just guiding principles—they are the blueprint for turning AI-driven transformation into reality. By embracing them, grocers can move beyond incremental improvements and unlock entirely new levels of efficiency, personalization and performance.