Consumer Edge Data Reveals Grocery Shakeup: Specialty and Discount Grocers Outperform While Supermarkets Lose Their Grip

Consumer Edge, the leading provider of global consumer data-driven insights, released its U.S. Grocery Outlook 2026, showing that shoppers are changing where they buy groceries, with specialty retailers gaining market share and traditional supermarkets losing ground.

While overall grocery spending declined approximately 3 percent year-over-year (on a 12-month basis ended Feb. 28, 2026), Consumer Edge's transaction data shows that consumers aren’t simply spending less – they are becoming more selective and shifting dollars toward retailers that offer either strong value or a more differentiated shopping experience.

Trader Joe's stood out as the category's top performer, growing more than 3 percent year-over-year, outperforming the grocery sector by 6 points. The brand is gaining traction across income levels and age groups, including double-digit year-over-year growth among Gen Z shoppers. It also continues to outperform peers on customer loyalty, with a 35 percent retention rate four quarters after first purchase – higher than both ALDI and Wegmans.

Additionally, many shoppers who buy groceries at competitors still spend a significant portion of their grocery budget at Trader Joe's. For example, Sprouts Farmers Market shoppers allocate 48 percent of their specialty grocery spend to Trader Joe's, and Wegmans shoppers allocate 47 percent.

Additional insights from the report include:

• Specialty grocers are winning over shoppers across income levels – The specialty grocer subsector, comprised of retailers such as Trade Joe's, Whole Foods and Wegmans, are seeing growth from low-, middle- and high-income households, signaling broad consumer appeal across income groups.

• Traditional supermarkets are losing ground – Traditional supermarkets, including names like Publix and Safeway are seeing pullbacks from every income group, with the sharpest declines among lower-income shoppers.

• Discount grocer share has leveled off after several years of gains – Retailers such as ALDI, Lidl, Food 4 Less and Grocery Outlet gained share of the overall grocery market from early 2022 through mid-2024 as shoppers traded down; however, that growth has plateaued since mid-2025. Whether that trend continues will depend on the trajectory of food inflation and whether shoppers continue to shift spending toward specialty grocers.

• Sprouts' rapid expansion is intensifying competition, even in Whole Foods' home market  – Sprouts Farmers Market has grown its Texas store count by more than 12 percent annually over the past three years and now operates 477 stores across 24 states – with at least 40 more planned for 2026. In Austin, where Whole Foods was founded, the share of Whole Foods shoppers who also visit Sprouts climbed from 29 percent in March 2024 to 33 percent by February 2026.

"What's happening in grocery isn't just about price. Shoppers are making more deliberate choices about where they spend their money, and they're gravitating toward retailers that give them a clear reason to be loyal – whether that's unbeatable value at a hard discounter or a curated, private-label experience at a specialty grocer," said Michael Gunther, SVP, Research & Market Intelligence, at Consumer Edge. "Traditional supermarkets are caught in the middle, and the data suggests that pressure isn't going away. The grocery retailers best positioned for 2026 are those with a distinct identity and a customer base that keeps coming back."

Consumer Edge's full U.S. Grocery Outlook 2026 can be found here.