Expectations of what artificial intelligence can do have shifted – quickly and decisively.
In my short tenure at Food World/Food Trade News, the contrast has been striking. At GroceryShop 2025, vendor booths touted ‘AI this, AI that.’ Fast forward to NRF 2026: “Retail’s Big Show” in New York, and the term was noticeably absent from booths and promotions. That’s not because AI solutions disappeared. It’s because the packaging changed.
Business buyers have moved past what AI could be and are now grappling with what it actually is. In other words, the urgency has moved beyond possibility to deployment. Leaders are racing to understand how AI fits into existing systems, workflows, and decision models. The FMI Midwinter Executive Conference added further confirmation that expectations throughout our industry have reset.
One theme keeps resurfacing in my travels: the “why.” Executives are drowning in dashboards – terabytes of data harvested by increasingly sophisticated tools – but are still searching for clarity on what actions to take.
And so our biggest constraint isn’t data anymore, rather, it’s the context of why. Which is important, because we can’t learn whether “it” was the right choice afterwards, if we don’t understand why we did it.
That lens of context applies cleanly to Amazon’s recent grocery headlines.
Amazon’s Grocery Moves Are Strategy, Not Chaos
The planned closures of Amazon Go and Amazon Fresh locations were framed as retrenchment; some pundits even suggested the entire venture into brick-and-mortar, small format retail was a failure. But I’ve said it for months now: this is testing. What looks like mere thrashing about is in fact disciplined iteration in search of a winning format. And make no mistake – Amazon is the shark. The JAWS theme is playing quietly in the background.
Amazon has announced plans to open 100 new Whole Foods stores over the coming years and is currently building a 230,000 square foot grocery and general merchandise concept outside Chicago, expected to open in 2027.
The intent of these moves is clear: Amazon wants to aggressively challenge Walmart at scale.
An analyst note we uncovered late last year captured the reason Amazon is uniquely dangerous in grocery: Amazon Web Services (AWS) throws off so much profit that Amazon can afford to lose tens of billions for years while building toward grocery dominance.
I believe Amazon could control 40 percent of the entire grocery market within a decade. (It’s worth understanding that they already hold 20 percent of the digital grocery market.) If Walmart can hold 30 percent overall, there is room – but not much margin for error – for Amazon to grow in brick-and-mortar.
That grim reality should concern every other operator in the space.
My local Giant Food sits less than 50 yards from a Walmart; it’s proof that a well-run grocery operator can coexist with a big box neighbor. But in a margin-constrained environment, adding another behemoth to the feeding trough raises the bar significantly – especially for retailers without a clear vision or brand platform.
Agentic Shoppers: Real, Overhyped, Or Premature?
Many AI vendors still sell solutions like late-night infomercials: every retail problem conveniently solved by AI. For operators, discerning the difference between “trash” and “cash” is legitimately hard. Which tools create durable value, and which become expensive experiments?
NRF showcased AI-assisted solutions across shelf tracking, inventory management, theft reduction, shopper behavior analysis, and frictionless checkout. But the cost/ROI curve matters. Amazon reportedly spent more than $2 billion developing “Just Walk Out” technology — technology it just shelved. Few retailers can afford that kind of “tuition.”
The most productive AI integrations we’ve seen are not moonshots but workflow enhancements. Tools that solve 75 to 85 percent of a problem deliver far more ROI than chasing full automation at triple the cost. Keeping a human in the loop isn’t a failure of your AI solution, it’s good system design.
This makes the current hype around fully agentic shoppers feel premature. Traditional AI gives shoppers recommendations, while agentic shoppers act as autonomous personal shopping assistants that research, compare, and purchase products on behalf of a human user. In other words, they complete an entire transaction unassisted.
Yes: auto-replenishment for staples like paper goods, milk, or eggs can make sense. They equate to lowest cost and most regular cadence with minimal thought. But the idea that consumers will outsource their entire grocery experience to AI agents misses something fundamental.
For many consumers, grocery shopping still carries joy, experience, and community connection. AI agents ordering groceries from AI grocers? I don’t buy it. That connection won’t disappear quietly. And I’m not sure anyone would want it to.
This isn’t the only outside force the industry has to contend with.
Heavy-Handed Legislation Misses the Mark
Meanwhile, legislatures are rushing to “protect” consumers from grocery advancements and pricing practices – often without understanding the technology involved.
Maryland’s SB 387, the “Protection from Predatory Pricing Act,” attempts to limit shelf price changes to once per day. Most retailers we talked with said they already operate on weekly cycles, making the provision largely symbolic.
More problematic are the bill’s broad restrictions on surveillance and data use, effectively banning customer insight altogether. They managed to squeeze in some unrelated labor provisions, too. The result is a grab bag of good intentions with little coherence.
Connecticut’s HB 6856, often framed as backlash against Instacart, is actually a revived effort to address shrinkflation by penalizing manufacturers that reduce package sizes without lowering prices. Enforcement will be… challenging to say the least.
More interesting is New York’s S 8563, the “Consumer Grocery Pricing Fairness Act,” aimed at protecting independent grocers from price inflation by “dominant” retail buyers against smaller operators. In Pennsylvania the food and beverage industry is fighting additional food ingredient bans – as if the federal requirements won’t be enough.
A positive legislative note comes from Maine, where they recently struck down a dynamic pricing bill in a win for retailers. While 40 states have laws that prohibit price gouging, there isn’t a federal law for this kind of consumer protection.
The closest bill trying to fix that at the federal level, HR 4966, the “Stop Price Gouging in Grocery Stores Act” of 2025, appears designed not to pass. It actually includes a provision banning electronic shelf labels in stores larger than 10,000 square feet.
This is simply legislative grandstanding. All without meaningfully trying to help shoppers.
Consumer protection matters – but it requires care. It’s hard to say if any of these bills should pass. Laws written without technical fluency or understanding of our business risk breaking the few tools retailers use to operate efficiently.
I’ll extend an open hand to any legislator who is trying to help both the industry and consumers. Reach out, contact us. We can help you understand how to protect people and your grocery stores without overreach.
The Bottom Line
AI’s real value in grocery isn’t theoretical, but operational. It lives inside daily workflows, decision support, and partial automation – not in fantasies of fully autonomous shopping or brute-force regulation.
Retailers who focus on context over spectacle and discipline over hype will be the ones still standing when the noise fades. And it will fade.
Editor’s Note: We toured a leading seafood supplier’s facility his week. I learned that their current success was built, in part, on physical investments made almost 10 years prior. Their operation was truly impressive in scale and organization.
I mention this because we’re close to the launch of our new website and our new weekly e-letter. We’re still very much in the beta/testing mode, so please don’t fault us for not pulling out the grand re-opening banners yet. But we’re excited about the new build and what it will allow us to offer our readers. More to come soon.
