Specialty and discount grocers are gaining market share and foot traffic, outpacing traditional supermarkets.
Consumers are splitting spending between low-price retailers and premium specialty stores.
Traditional supermarkets are losing share as shoppers prioritize value, convenience, and targeted purchases.
Higher prices are changing consumer behavior, especially where they shop for groceries.
A new analysis from Consumer Edge shows a growing divide in the grocery industry, with specialty and discount chains outperforming traditional supermarkets, as shifting consumer habits reshape where Americans shop for food.
The report finds that value-oriented and specialty grocers are capturing a larger share of customer visits and spending, while conventional supermarkets are gradually losing ground. The shift reflects broader economic pressures and changing shopper priorities, particularly around price and product differentiation.
Rising food costs have pushed consumers to seek out lower prices, boosting discount chains such as Aldi and Grocery Outlet. Transaction data shows discount grocers have increased their share of the grocery market in recent years, driven by widespread value-seeking behavior across income groups.
But not all consumers are struggling. Specialty grocers — including chains focused on organic, fresh, or unique products — are attracting shoppers willing to pay more for quality and curated assortments. These retailers have posted stronger traffic growth than traditional supermarkets, with consumers often traveling farther to shop their offerings.
Two kinds of consumers
Together, these two segments are driving what analysts describe as a “bifurcation” of grocery spending: budget-conscious shoppers gravitating to discounters, while higher-income consumers increasingly favor specialty stores.
Traditional supermarkets, meanwhile, are caught in the middle. While they still account for the majority of grocery visits, their share has been steadily eroding, with foot traffic slipping in recent years as shoppers spread purchases across multiple store types.
The shift is also changing how people shop. Instead of making one large weekly trip, consumers are making smaller, more frequent visits — often across multiple retailers — to manage costs and find specific items.
Industry insiders say supermarkets are responding by emphasizing private-label products, promotions, and value-focused formats, but the competitive pressure is intensifying. The long-term outlook suggests continued fragmentation, with no single grocery format dominating as consumers balance price, convenience, and quality in new ways.