Grocers Fight Soft Demand With AI and Discounts as New Jersey Curbs Pricing Tech

A Turbulent Week for Supermarkets: Soft Sales, New Tech and New Rules

The US grocery industry sent mixed signals in the past week, as chains wrestled with cautious shoppers who are spending less on food even while grocers pour money into new technology. Albertsons provided the clearest warning: the company reported strong first-quarter growth in digital and pharmacy sales, but said softness in its core grocery business forced it to slash its full-year outlook.

Rivals are responding with digital tools rather than price cuts alone. Kroger is launching a new artificial intelligence-powered shopping assistant to help customers shop, and Edwards Food Giant, an independent Arkansas grocer, is personalizing its weekly ads to compete with larger chains. Albertsons is also investing in its workforce, adding a range of financial wellness benefits for employees.

The policy environment is shifting too. New Jersey Governor Mikie Sherrill signed legislation that bans surveillance pricing and delays the use of new electronic shelf labels, a direct constraint on grocers' data-driven pricing ambitions. In New York City, the administration said city-owned grocery stores will offer 30% discounts on core items — savings the city estimates at about $90 a month, or roughly $1,000 a year, per shopper.

Consumers are also changing where they buy everyday goods. J.D. Power research shows mail-order pharmacies now rank higher in customer satisfaction than brick-and-mortar pharmacies, adding pressure on stores that combine groceries with pharmacy service.

Why Grocers Are Piling Into Technology as Shoppers Stay Cautious

The Albertsons Guidance Cut Puts a Number on Consumer Caution

Albertsons' decision to lower its outlook is the most concrete signal yet that food demand is cooling. Digital and pharmacy grew strongly in the quarter, but the core grocery aisle did not — a pattern that suggests shoppers are trimming baskets and trading down to cheaper options after years of elevated food prices. For an industry that has relied on steady volumes, this points to a period of flat-to-down sales and thinner margins, not a collapse.

Personalization, Not Price, Is the New Battleground

Kroger's AI shopping assistant and Edwards Food Giant's personalized weekly ads share the same logic: grocers that cannot win on price alone are trying to win on the shopping experience and basket size. Data-driven recommendations can lift average order value and loyalty, which is why even a small independent chain like Edwards Food Giant is investing in targeted shopper engagement. But this is also where the lines get blurred — the same data that powers helpful recommendations can become the basis for individualized pricing, which is precisely what New Jersey lawmakers have now banned.

New Jersey Draws a Regulator's Line Around Grocery Data

The New Jersey law banning surveillance pricing and delaying new electronic shelf labels is a warning shot for the entire industry. Electronic shelf labels are the hardware that makes rapid, data-driven price changes possible, and several major chains have been testing them. By delaying their use and banning surveillance pricing outright, New Jersey has created compliance risk for grocers' technology roadmaps and signaled that other states may follow. Grocers will now have to prove their pricing tools are transparent and not based on tracked shopper behavior.

Mail-Order Pharmacy and Public Discounts Squeeze From Two Sides

J.D. Power's pharmacy satisfaction data shows brick-and-mortar pharmacies losing ground on convenience and cost to mail-order rivals, which matters for grocers that use pharmacies to drive foot traffic. At the same time, New York City's plan to discount core items by 30% at city-owned stores turns affordability into public policy, putting competitive pressure on private grocers in the city to respond on price. Both developments point to the same conclusion: traditional formats are being squeezed on price, convenience and technology all at once.

What Grocers, Regulators and Shoppers Should Track Next

• Grocers rolling out electronic shelf labels or data-driven pricing tools: New Jersey now bans surveillance pricing and delays new ESLs — audit existing and planned pricing systems for compliance before further rollout, as other states may copy the law.
• Suppliers to Kroger and Albertsons: AI shopping assistants and personalized promotions will change which products get featured and recommended — model how promotion budgets shift toward data-driven placements and adjust category plans.
• Retailers planning around consumer demand: Albertsons' outlook cut reflects cautious shoppers and soft core grocery trends — plan for flat-to-down volumes and keep inventories lean for the current cycle.
• Shoppers in New York City: city-owned grocery stores plan 30% discounts on core items, worth roughly $90 a month or $1,000 a year — confirm which items qualify at your nearest location.
• Pharmacy operators: J.D. Power data shows mail-order services outranking brick-and-mortar pharmacies on satisfaction — focus on pickup speed and service conveniences that mail-order cannot match.