Grocers' Tech Adoption Helps Drive Store Expansion

In-store technology has been a key driver for leading store brands to expand with the 30 largest grocers in the US having opened more than 500 new stores since 2020, totaling almost 26.3 million sq. ft.

Early estimates for 2024 from retail analytics firm RetailStat anticipate at least 80 new store openings totaling 4.3 million square feet.

“The growth in store footprints is occurring at a time of markedly increased funding for grocery-focused tech companies relative to pre-pandemic levels,” according to a report from CBRE.

A Forrester survey showed that more than half of customers said that they either already use or are interested in using mobile devices for in-store checkouts.

In turn, investments by grocers in technology have helped to boost overall sales by 5.3% year-over-year in 2023, leading to more demand for retail space, CBRE said. E-commerce accounts for just 6.6% of total US grocery sales, most of which (84%) is fulfilled in-store, according to grocery software firm Mercatus.

While the software is important to operators in the Mercatus survey, 60% said cost is the leading reason for them not investing as such.

Popular technology strategy self-checkout stations, however, has led to greater theft. A survey of 2,000 US consumers by online lending service LendingTree found that 15% of self-checkout users admit to stealing and another 21% admit to “accidentally taking an item.” Of those who have admitted to stealing, 44% said they would likely do so again.

Self-service accounted for 38% of check-out stations at major grocery chains and grew by 10% annually in the previous five years, according to consumer intelligence company Catalina.

Grocers are beginning to respond by either restricting their use or eliminating them. Costco has added staff in self-checkout areas and Target has a pilot program at some stores where self-checkout is limited to shoppers with 10 or fewer items, CBRE reported.