What Opportunities, Challenges Lie Ahead for Retailers in 2023?

The grocery industry has faced a spate of challenges over the past several years, from the pandemic and economic downturn to rising inflation and changing consumer preferences. Sales and marketing services provider Acosta is taking a look at the challenges looming for food retailers in the coming year, as well as opportunities they can take advantage of.

Economic challenges will persist, according to Kathy Risch, SVP, consumer insights and trends at Jacksonville, Fla.-based Acosta, as hybrid shopping and wellness simultaneously take center stage.

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"The economic challenges of the past year will continue to impact consumer behavior in 2023, providing overarching context for what shoppers most care about and how they want to shop," said Risch. "We foresee continued impact from economic challenges as consumers are heightening their expectations for personalized, hybrid and omnichannel shopping, and their redefined focus on wellness for themselves, others and the planet."

First among Acosta’s predictions is that regardless of a true consensus among economists, nearly half of all shoppers believe the United States is in a state of recession. As such, 67% are spending less on discretionary items like clothing, 63% are eating up as much food as they have on hand before buying more, and 61% are eating out less, according to Acosta data.

"When shoppers believe we are in a recession, they will behave as though we're in a recession," says Risch. Many are still indulging in snacks and beauty products, though, which could prove to be a boon for retailers.

Additionally, Acosta sees retail experiences, both online and in-store, that surprise and delight to win over customers this year. Evolving personalization is another upcoming trend, with value, discovery and trial based on new technology like artificial intelligence and retail media becoming must-haves.

Committing to collective wellness will also be important to consumers, and encompasses not only the individual, but also families, the earth and animals. Retailers are expected to provide more in-store clinics and other health services, while also prioritizing things like plant-based products – a segment with retail sales predicted to be $162 billion by 2030, up from $29 billion in 2020.

Hybrid shopping is also here to stay in 2023, as is at-home consumption of food.

"The most successful organizations will expediate the seamless shopping and branding experience, also understanding that consumers want to make informed, smart, values-driven choices for themselves and their families,” Risch concluded.