Exec: How Grocers Must Evolve in 2023

The grocery space has been upended over the past three years, with more changes on the horizon, but leaders need to face their challenges with patience, according to’s Retail Trends Forecast 2023 report.

Companies have now had time to watch and understand how and why shoppers are changing, and they should use this knowledge to carefully chart the way forward.

“I can trace back the last three years in the retail space,” said R.J. Hottovy, head of analytical research at “In 2020, it was all about perseverance and COVID changing consumer behavior, while 2021 was a year of learning as people really did change a lot of things in terms of behavior.

“Then, this year has been more about adjusting to that changing consumer behavior and really optimizing the way your physical retail stores work — ultimately getting better utilization out of them.”


One area that has been getting plenty of press over the last year is retail media networks. This provides a fresh new channel that can provide great results without massively changing core operations.

While CPG suppliers make natural partners, grocers should also be looking out for other operations that can benefit from advertising in their stores, according to Hottovy.

“Some of these local brands, these local restaurants and fitness clubs, could potentially advertise through a grocery store,” said Hottovy. “If you look around, some of the largest sports leagues are also really interested in kind of finding new partnerships at the local level, which I think is really interesting. I think that retail media networks can be a part this. It’s the next stage of evolution.

“It’s part of finding ways to better utilize your store because of the frequency of visits that grocery stores typically have.”


Grocers also can turn to the foodservice industry to drive more value out of their own foodservice offerings. Hottovy noted that chains like Chipotle have managed to minimize their sales dips despite high inflation by focusing on innovation to keep consumers interested. Even McDonald’s, typically a value brand, has put a greater emphasis on celebrity partnerships and promotions.

Grocers can apply these lessons to their own operations to build excitement without compromising on value.

The coming year also will be a time to understand what sees as stabilizing migration trends, according to Hottovy. Consumers have been moving around at a higher than usual pace over the past several years, with suburbs and rural areas seeing significant growth, but now that trend is starting to settle down and it’s time for retailers to get an understanding of how their customer base has changed.

This has opened new opportunities, such as expanding into smaller towns and cities that were previously deemed unprofitable. Hottovy noted that now is the time for companies to carefully adjust their operations according to what they see, rather than shift in a panic as many were inclined to do in early 2020.

“Don’t overreact to things, but you still have to adjust once the dust settles,” said Hottovy. “I think that’s what we’ve seen in the two years since the initial COVID waves. A lot of consumer behaviors have changed, but things are starting to stabilize, whether it’s migration or shopping behavior, and now I think you can make some actual decisions and some capital allocation decisions based on these changes.”