by Alexander Wissel, Executive Editor
In the lofty offices here at Food World and Food Trade News we’re often discussing the future of grocery and where things are headed. Our staff here has literal centuries of experience in the industry – it’s an incredible group. I’m aggressively playing catch-up.
Resolutions and wild predictions are rife this time of year for good reason. It’s time to reflect upon last year and to plan for the year ahead. We see a lot of AI generated content that suggests that the 2026 themes are: affordability for consumers, AI in all aspects of grocery commerce, GLP-1 impacts and omnichannel consumer connection.
These might all be true. In fact, we broke out each of these topics here: 2026 trends. But there’s nothing new here either. I haven’t seen anyone make any interesting edgy or wild predictions. We’ll correct that in a moment, because the industry is rapidly changing.
So here are two wild predictions for changes in the upcoming year.
Wild Prediction No. 1: The Year We Have a Hard Look at SKU Counts
Is this the year of massive cuts to your SKU count? For those neophytes, Stock Keeping Units (SKUs) are the individual codes given to each product item in a store. These counts are closely watched by CPG insiders for trends and adjustments.
A typical supermarket provides anywhere from 20,000 to 50,000 SKUs in its stores. A big box / megamarket might hold 80,000. Private label darling Trader Joe has around 4,000 while discounters like Aldi hold just 1,400 to 2,000 per store.
Small SKU offerings from Aldi and Trader Joe’s allow these companies to reduce costs by simplifying operations. At the same time they are building loyalty and trust with these curated offerings. Less product = more focus.
Economically strained consumers are making more trips to more stores. Their baskets are smaller and they are less committed to a single shopping location. This is a huge shift in behavior.
The shift is happening regardless of whether retailers can stop it, why not take the opportunity to evaluate your whole inventory? It might be time to cut those low margin items that aren’t trip drivers or consumer essentials. Margin must drive the conversation.
Shopper patterns indicate that consumers are breaking up their shopping through warehouse clubs, budget discounters, and lifestyle preferences. In addition, shoppers are using apps to compare prices, plan and buy.
Simplicity matters, and people still matter. Operational efficiency from reduced SKU counts isn’t the easiest way to find cost savings… but staffing is.
Aggressively reducing SKU counts isn’t just a slash and burn tactic, but rather should be a careful look at who your customers are, what they want, and what they truly come to you for. That might be an uncomfortable proposition that every store isn’t the same, and that every location offers a different mix of products – one size doesn’t fit all.
We know this is a sacred pillar of grocery, so we’re putting the finishing touches on a deeper dive into this. Keep your eyes peeled.
Wild Prediction No. 2: Speed Kills… Profits
As a culture, we’re incredibly impatient. Compared to the cathedral builders in the 1200s, there are very few things that can’t be solved and completed in your lifetime, much less in a few hours.
The Cologne Cathedral took 623 years to build. When you consider the average life expectancy was 40ish, that’s a lot of generations to finish a project. Humanity has very few cultural endeavors that approach that timeframe anymore – perhaps when we start terraforming planets?
Today you can order something online and have a reasonable expectation that you’ll have it at your doorstep by the time you finish a movie. That’s incredible if you think about it. And consumers seem to be pushing for faster and faster service.
Or are they? If I were to ask you if you’d like something now, or in 3 hours I can almost guarantee that you’re going to say now. Faster = better right? So every company wants to cut delivery times and make it faster… because that’s what consumers want?
Three-hour delivery, two-hour, one-hour… 30 minutes. Instantaneous?! Are Amazon and delivery apps programming customers to want it faster? Do they actually? Is 2026 the year “faster” isn’t better?
Interestingly, there are some generational differences here. Gen Z and Millennials expect faster delivery – but they are willing to pay more of that. Boomers are less likely to want to pay for that same convenience.
Strategically repositioning delivery and managing consumer expectations could cut operating costs of these services. Pitching it as a sustainable option (with lower emissions) could appeal to younger consumers who are concerned about social impact.
Delivering personally picked goods is expensive. Walmart just became profitable at it last year, Kroger expects to run its e-shopping as a profit for the first time this year. These are giants with massive resources at their disposal to solve this problem. Walmart has been working on it since 2013 when it started curbside pickup.
This expectation of speed kills profits. And for smaller independents it’s a hard cost to absorb.
So the answer might be to stratify your delivery per your customers needs. Some of your customers pay for the convenience and speed, while the other half accept slower but free. It would mean that picking isn’t a problem and delivery isn’t a drain.
This year might be the year that faster isn’t better in grocery and SKU counts start getting severe haircuts. What do you think?
