Grocery outlook data shows specialty retailers gaining market share

A recent study from Consumer Edge finds that as consumers shift their grocery dollars, specialty retailers are gaining market share at the expense of traditional supermarkets.

The U.S. Grocery Outlook 2026 shows overall retail spending dropped 3 percent year-over-year (ending February 28, 2026), but Trader Joe’s grew 3 percent during the time period.

Also, discount grocers such as Aldi, Lidl, and Grocery Outlet, had seen growing market share amid food inflation, but that has leveled off.

According to the report:

• 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.