Grocery retailers expand prepared foods to compete with restaurants

Grocery retailers are increasingly transforming into dining destinations to compete with restaurants and takeout services. According to FMI’s State of Fresh Foods 2026, fresh departments accounted for 41% of food-retail sales last year, with deli prepared foods driving increased foot traffic. In response, 77% of retailers intend to expand grab-and-go fresh spaces over the next two years.

This shift comes as U.S. retail food and beverage sales saw a 2.2% increase in the first half of 2026, despite flat sales volumes. As consumers report eating fewer restaurant meals and ordering less takeout, supermarkets are leveraging prepared meals—such as sushi, pizza, and chef-prepared entrées—to capture more meal occasions.

In the Asian market, DFI Retail Group’s Wellcome is focusing on building brand loyalty through consistency and trust rather than promotional hype. Darren Chan, MD of Food for Hong Kong & Macau at DFI Retail Group, emphasizes that grocery retail success relies on being a reliable part of a consumer’s daily routine by delivering quality, value, and convenience.