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Food retail is undergoing a fundamental transformation, and few people have a better vantage point than the SupermarketGuru Phil Lempert. In this episode of Food for Thought Leadership, Lempert joins FI‘s Chris Campbell to discuss the forces reshaping grocery, from inflation and private label growth to changing consumer expectations around health, wellness, and transparency.
The conversation explores why traditional supermarket formats may be reaching their limits, how retailers can compete in an increasingly crowded landscape, and where artificial intelligence is already creating value for shoppers. Lempert also shares his outlook on the future of grocery retail, including the rise of smaller, more specialized stores, the growing importance of prepared foods, and why retailers that establish trust and a clear brand identity will be best positioned to win over the next decade.
Transcript (Edited for Clarity/Brevity)
Consumer Behavior Has Fundamentally Changed
Phil Lempert: “The biggest change is because of the COVID situation, where people are shopping very differently than ever before. They’re reading more labels than ever before.”
Phil Lempert: “When we look at health and wellness, what’s going on in Washington, DC, with RFK Jr., what’s going on with GLP-1s, I’ve got to say that the whole supermarket world and CPG world is on a different course.”
Phil Lempert: “Let’s remember we’ve got climate change, we’ve got a war in Iran that’s affecting fertilizer prices as well as diesel prices, and we’ve got a labor shortage because of ICE raids on our farms and in our poultry factories.”
Inflation Is Reshaping Grocery Shopping
Phil Lempert: “People are certainly buying more store brands than ever before, and they’re shopping around. They’re going to Aldi, they’re going to Walmart.”
Phil Lempert: “Aldi last year had over 19 million new customers in their stores.”
Phil Lempert: “That traditional 40,000-square-foot supermarket has to change. It just can’t exist the way it’s going now.”
Phil Lempert: “It’s probably going to get a little smaller. It’s probably going to get more curated.”
The Rise of Hybrid Shopping
Phil Lempert: “Certainly we’re not going to see food prices go down in our lifetime.”
Phil Lempert: “I do think shoppers are going to change a bit, and I think they’re going to do more hybrid shopping.”
Phil Lempert: “That supermarket is going to be more of a fresh experience, where I’m going to go in there for my baked goods, I’m going to go in there for Bob the butcher, and deli products.”
Phil Lempert: “Think of our homes as a pantry shop.”
Phil Lempert: “It’s not going to be delivered, it’s going to be picked up at the store, because no grocer is making money on delivery.”
Private Label Is Winning Share
Phil Lempert: “Or even exceeding the national brand sometimes.”
Phil Lempert: “It’s not just about saving money, it’s about the quality of it.”
Phil Lempert: “The store brands used to be when you couldn’t afford the real thing. Well, not anymore.”
Phil Lempert: “Generation Z and millennials are very food focused, very value focused, and very quality focused.”
Phil Lempert: “These stores have personality.”
Phil Lempert: “We’re starting to see stores get more personality, and that’s a way to hold on to consumers.”
Phil Lempert: “They’re building real fans.”
Phil Lempert: “They’re having very loyal shoppers, and they’re innovating.”
Phil Lempert: “There’s no question that CPG is very concerned about store brands, and they’re losing market share to them.”
Prepared Foods and AI Create New Opportunities
Phil Lempert: “People are getting meals elsewhere.”
Phil Lempert: “Supermarkets have a great opportunity to offer great prepared food at a lower price.”
Phil Lempert: “Either to sit in the restaurant itself in a supermarket or to bring home.”
Phil Lempert: “It’s both on the recipe side as well as the shopping list side, as well as the price side.”
Phil Lempert: “I can save money, so I can be shopping two or three stores all at the same time.”
Phil Lempert: “Give me a recipe, and it spits it out in a nanosecond.”
Phil Lempert: “I’ve used it for recipes, I’ve used it for shopping lists, I’ve used it to compare products from a nutritional standpoint.”
Phil Lempert: “It’s endless what can be done with this.”
Health, Transparency, and the Future of Retail
Phil Lempert: “I think they underestimate health, health and wellness.”
Phil Lempert: “It’s harder for consumers than ever before.”
Phil Lempert: “The opportunity for supermarkets is being that trusted source for consumers.”
Phil Lempert: “The opportunity for supermarkets is to become that real clear communicator of what’s true, what’s not true.”
Phil Lempert: “Consumers are going to just be able to take their smartphone, hit that QR code, and find out everything.”
Phil Lempert: “I think coming up with new store formats is the big opportunity.”
Phil Lempert: “The traditional 40,000-square-foot supermarket, in my mind, is a dinosaur.”
Phil Lempert: “You’ve got to figure out what your DNA is in that supermarket.”
Phil Lempert: “Find out what your personality is.”
Phil Lempert: “Every supermarket can have it.”
Phil Lempert: “I think we’re going to see more specialization.”
Phil Lempert: “I think we’re going to see smaller stores.”
Phil Lempert: “We’re going to see more fresh foods in the store.”
Phil Lempert: “We’re going to be buying more things online that are shelf stable, and just pick them up at the store.”
Phil Lempert: “I think we’re going to see a lot more competition.”
Phil Lempert: “Supermarkets are going to find themselves in a different role in two years and three years, and they’re going to have competitors that they never imagined they would have.”
