THE NEXT REVOLUTION IN GROCERY WILL HAPPEN AT THE EDGE — NOT IN THE AISLE
Most grocery stores are the same. They have a center store filled with packaged, ambient products — cereal, pasta, soup, bread, peanut butter — and they have a perimeter where shoppers buy fresh fruits, vegetables, meat, dairy, cheese, prepared meals, baked goods, and alcohol. It's a format that has been in use for nearly 100 years in the USA.
Here’s the reality:
Margins in the center store average 1–3%. Margins along the perimeter can reach 30–40%. Yet grocery retailers continue to pour time, capital, and labor into the least profitable part of their business — the center aisles — instead of doubling down on the part that actually drives margin, differentiation, and loyalty.
I disagree with the grocers who are turning their stores into Las Vegas and Times Square through annoying in-store retail media. A much better option is to partner with Uncrowd Inc., for the most advanced customer intelligence through AI-powered analytics. Kroger spends over $10M annually on useless customer surveys. Uncrowd can provide far superior data and results for $4M.
It’s time for a radical rethinking of the grocery model.
I believe grocery retailers should outsource the center store to companies like Instacart and DoorDash. Let them manage ambient goods, in-store inventory, replenishment, online grocery fulfillment and last-mile delivery. Turn the center store into a logistics layer that’s digitally optimized — not an operational burden. There are many interesting designs that can be leveraged to re-imagine the center store.
This is an opportunity for DoorDash and Instacart (or Uber and Instacart if Uber acquires Instacart) to revolutionize the grocery industry. Note to Kroger: Turn over the Ocado Group partnership to DoorDash.
Free up the grocer’s capital, space, and focus to reinvent the perimeter — the area that truly matters. The perimeter is where grocery retail’s future lies:
✅ Cooked and prepared meals for takeout or delivery
✅ The freshest of the fresh fruits and vegetables
✅ The highest quality meats, poultry, and fish
✅ Personalized nutrition
✅ AI-powered kitchen planning and in-store dining experiences
✅ AI Health Clinics and pharmacies
Innovation won’t happen in the aisle — it will happen around the edge. The perimeter is where grocers create emotion, community, and profit.
The grocery retailer of the future will look less like a warehouse of goods and more like a culinary ecosystem: part restaurant, part kitchen, part experience hub — supported by outsourced logistics that deliver online grocery and food. The future can be today. Instacart and DoorDash can make this happen.
It’s time to stop thinking about “selling groceries” and start thinking about engineering shopper experiences that deliver velocity, margin, and growth.
The next great grocery retailer won’t be the one with the best center store. It will be the one that eliminates it.
#retail #strategy
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2wImpressive milestone — and a great case study in how AI is moving beyond analytics into real-time operational decisioning. What’s especially powerful here is how Afresh and Albertsons have embedded intelligence directly into daily workflows, where freshness, waste reduction, and customer experience meet. It’s one thing to predict demand — it’s another to close the loop between prediction and action at scale across every fresh department. Curious — as AI-driven replenishment expands, how do you see human expertise and local knowledge continuing to shape the “art” of grocery alongside the science?