Retail in 2026: The Practical Shifts Leaders Say Matter Most

Retail is operating under genuine pressure and genuine possibility at the same time. Cost-to-serve remains high, shopper behaviour is fragmenting, health expectations are evolving, and data is becoming richer while decision cycles continue to compress. In that context, “trends” can become noise unless they translate into clear commercial implications.

To keep this grounded, we asked a group of senior leaders across grocery retail and FMCG one question: what is the biggest, most meaningful shift happening in retail this year, and why does it matter?

Their answers are not identical, but they do cluster around a handful of themes: the expanding role of analytics, the polarisation of shopping experiences, the rise of outcome-led missions (especially around health), the push toward more personalisation, and a renewed focus on strategy rather than activity.

Below are their perspectives, shared in their own words.

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1. Health Is Reshaping Categories - Especially in Convenience

Health trends are no longer confined to reformulation or claims. They are influencing structural decisions about range, space allocation and mission priority, particularly in smaller formats where trade-offs are sharper.

Jimmy Corbett, Head of Trading - FTG & Meals, Co-op

“Health trends are reshaping retail across the board, but the impact on convenience is disproportionately large. When you operate in smaller formats, every decision about range and space is amplified. You can’t just layer in new health-led propositions without consequence. 

If you back emerging trends too heavily, you risk destabilising traditionally strong sellers that still drive volume. If you ignore them, you fall behind where shopper demand is clearly heading. That balancing act of supporting the shift towards healthier missions while protecting the core, is an ongoing tension for convenience retailers.

GLP-1 medications are a good example of why we need to rethink what ‘health’ actually means within specific categories. Appetite suppression and changing consumption habits don’t just influence one aisle. Portion sizes, treat frequency, protein demand, indulgence patterns are all in flux. Retailers have to anticipate those shifts rather than react to them.

Layer on regulatory and structural pressures - HFSS restrictions, long-term volume decline in BWS and tobacco - and it’s clear that relying on legacy categories isn’t a viable strategy. We have to double down on growth missions like food-to-go and meal solutions, and be prepared to make informed bets. It requires data, conviction and a willingness to evolve the space differently. The retailers who manage that transition thoughtfully, rather than defensively, are the ones setting themselves up for sustainable long-term success.”

Rebecca Oliver-Mooney describes a related shift in how categories themselves are framed.

Rebecca Oliver- Mooney, Strategy and Insight Director, Hip Pop

One of the most meaningful shifts we are seeing in UK grocery is the move from “product-led” retail to “outcome-led” retail, where shoppers are not just buying items, but where they are buying solutions for how they want to live. Health is the clearest example of this. The conversation has moved well beyond low-sugar or low-calorie into gut health, fibre, protein, functional benefits, and mindful consumption, with taste often a key driver of choice. That is changing how categories need to be structured, how fixtures are merchandised and how retailers think about growth. The winners will be the ones who organise around missions such as energy, hydration, focus, sleep, gut health, rather than traditional category silos.

What makes this shift so important is that it is commercially incremental. When you get it right, you are not just trading shoppers up within a category, you are bringing new consumption moments into store and into the basket. We are seeing shoppers substitute alcohol, traditional carbonates and even snacks for functional drinks that make them feel better, helping stem decline in traditional categories and helping emerging categories respond to seismic consumer behavioural shifts.

For retailers, that is a growth engine. For challenger brands, it is a huge unlock. It rewards brands that are insight-led, purpose-driven and able to tell a clear story on shelf. The role of data, insight and shopper understanding has never been more critical, but equally the role of ranging with intent needs to remain central to decisions. Success stories will be defined by those who curate solutions based on where the shopper is going, not where the category has been.

2. Strategy Is Being Re-Centred in Category Management

Execution technology has advanced significantly over the past decade. However, some leaders argue the more meaningful shift is happening earlier in the decision cycle.

Dr. Brian Harris, CEO, IntentAI

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Over the past decade, grocery retail has made substantial investments in execution focused technologies. Assortment optimization, pricing engines, shelf automation, and promotion analytics have delivered meaningful gains in efficiency and speed. Yet despite this progress, sustained category growth has remained elusive. The most consequential shift shaping grocery retail in 2026 is not another advance in execution capability. It is the reestablishment of strategy as the foundation of Category Management, now enabled by AI as a true decision-making layer.

Category Management was originally conceived as a discipline for differentiation and growth. Its purpose was to identify unmet consumer needs, attract non buyers, and expand demand at the category level. Over time, however, the focus narrowed. The discipline increasingly centered on optimizing existing performance rather than diagnosing the underlying constraints to growth.

As a result, organizations became highly proficient at answering operational questions. Which SKUs should be added or removed? How should shelves be configured? Which promotions perform best? These are necessary decisions, but they are not strategic ones. They presume that the growth opportunity is already understood.

In many cases, it is not.

When Category Management begins with execution rather than with demand diagnosis, the potential upside is limited from the outset. The industry has not suffered from a lack of activity.It has suffered from a gradual erosion of strategic rigor.

What differentiates 2026 from prior cycles of transformation is the maturation of AI driven decision making. For the first time, it is feasible to integrate multiple sources of consumer behavior, shopper expectations, and performance data at scale, and to use those inputs to inform strategy in real time.

Rather than serving primarily as a reporting or automation tool, AI is increasingly functioning as an upstream decision layer. It enables teams to identify where growth truly exists, quantify the size of those opportunities, and evaluate alternative strategic pathways before resources are deployed.

Leading organizations are using this capability to re anchor Category Management around a proven next generation process:

• Strategy first: defining the true sources of growth by understanding unmet needs, non-buyers, and demand gaps
• Planning second: translating growth ambition into a focused, prioritized roadmap with clear tradeoffs
• Execution last: deploying fewer initiatives, with greater precision and measurable impact

This Next Generation Category Management process is demonstrating its ability to unlock sustainable and significant category growth. Rather than producing marginal gains through repeated optimization, it consistently expands demand by addressing the underlying reasons  consumers do not buy. In practical terms, it moves organizations beyond incremental change and toward more organic category growth.

The role of AI in this evolution is frequently misunderstood. Its greatest value does not lie in faster planogram generation or automated pricing adjustments. Its value lies in enabling better strategic decisions. By synthesizing complex data streams and evaluating scenarios at speed, AI allows category leaders to return to the original intent of the discipline: differentiation and growth through insight driven strategy.

As competitive pressures intensify and consumer behavior continues to fragment, the limitations of execution only approaches are becoming increasingly clear. Efficiency alone cannot compensate for unclear growth priorities.

In 2026, the organizations that outperform will not be those that execute more frequently or more rapidly. They will be those that reestablish strategy as the cornerstone of Category Management, supported by AI that elevates decision quality across the enterprise. The defining shift is already starting to play out. It is not technological in nature. It is being driven by a return to disciplined, strategy led Category Management, now made scalable and actionable through advanced decision-making solutions.

3. Physical Retail Is Polarising

Lucy Howe, The Growth Factors, CEO & Co-Founder

A shift we’re seeing in grocery retail is the increasing polarisation of shopping behaviour. Shoppers are moving towards either highly efficient, low-interaction experiences or more engaging, social ones, with little appetite for the middle ground.

On one side, the physical act of grocery shopping is increasingly being delegated. Self-scan, online shopping and quick commerce are reducing friction and saving time, but they require significant investment as retailers adapt existing stores and old systems to meet demand. On the other, there is a growing desire for expertise, provenance and quality, reflected in the continued growth of farmers’ markets, artisan producers and specialist retailers.

This shift matters because it requires grocery retailers to make deliberate choices about where they can create the most value and how they build sustainable competitive advantage. A focus on functional efficiency at scale could, over time, drive a seismic shift in how stores are designed and how ranges are curated - prioritising speed, flow and fulfilment for online picking and quick commerce over traditional in-store browsing. In parallel, smaller or more specialised formats may lean into experience, adapting layouts to support broader ranges, expertise and human interaction. Taken together, this could move grocery differentiation to a new level beyond price wars and towards clearer retail propositions.

4. Personalisation Is Becoming More Granular

Expectations around relevance continue to increase.

Mike Freeman, Category Manager

“Tech is unlocking a level of hyper-personalisation that we just couldn’t realistically deliver at scale before.For years, convenience was the big battleground. Faster delivery. Easier checkout. Smarter replenishment. That’s now table stakes. The real opportunity is moving beyond convenience into genuinely tailoring products and services to individuals. Not broad segments. Not ‘young families’ or ‘urban professionals’. Actual people.

You can see it clearly in the baby category, where there’s growing demand for personalised nutrition and health solutions. Parents aren’t just buying formula or food anymore, instead they’re looking for something that reflects their child’s specific needs. What started in beauty - custom blends, tailored routines, skin diagnostics - is now migrating into other FMCG categories. Consumers increasingly expect brands to recognise them, not just target them.

The retailers and brands who figure out how to operationalise that - responsibly, intelligently, and at scale - are the ones who will build long-term loyalty. Because when something feels designed for you, switching becomes much harder. That’s where the real competitive advantage is emerging.”

Serena Smith, Head of Category (On Trade), Heineken

One of the most meaningful shifts in retail right now is the move toward truly personalised data. We’ve finally moved past the era of broad-brush recommendations - those “people like you bought…”days are being challenged as big data gets richer, smarter, and more specific.

Retailers now have the ability to understand shoppers at a far more granular level: behaviour, preference, mission, even mood in some cases. And that applies whether you’re filling a trolley in grocery or ordering a round in a busy bar.

The opportunity is huge - but so is the headache. With more data than ever, the challenge becomes how you turn sheer volume into something that actually feels personal, usable, and actionable for businesses. Retailers and suppliers need to take all that complexity and package it into clear, practical solutions that drive better decisions and better experiences. Whoever cracks that balance - precision without paralysis - is going to create real competitive advantage.

5. Analytics Is Becoming Enterprise-Wide Infrastructure

Analytics is expanding beyond commercial teams into operational and strategic functions across grocery businesses.

Nick Meagher, Head of Advanced Analytics and Insights, Co-op

We’ll continue to see a diversification of analytics inside Grocery organisations. The skill-sets generally used to analyse and understand customer behaviour for commercial and marketing teams are increasingly becoming adopted in other parts of the organisation as we realise what this type of thinking can unlock, areas we’ve worked more on include supply chain, logistics, waste and availability, property, and colleague insight disciplines; of course many of these areas already deploy their own specialist knowledge and tools but what is happening now is much more blending across analytics teams and disciplines.

This is partly in response to ever rising costs of doing business, which means the ability to move products through the operational system and efficiently run the store and meet customer demand is a constant balancing act. Retail Media is another area of diversification, as retailers are increasingly opening themselves up as media channels then the role of analytics and insight within that Grocer also evolves – how well you understand your customers, how well you can differentiate and segment your estate adds value to your offering as a media channel.

6. Premiumisation Is Being Rewritten for a Price-Sensitive Shopper

Charlotte Kiddle, Chief Research and Partnerships Officer, VST

Finally, one of the most significant shifts we've observed is in how brands are approaching category growth. The shopper has become acutely price-sensitive but that doesn't mean they've stopped trading up. What it means is that the justification for buying the more expensive product now has to work harder. Brands are responding by pulling multiple levers to keep shoppers within the branded tier and move them further up it.Here's how that's playing out at shelf:

‍Shifting space and position to earn attention for premium SKUs

Sometimes visibility is all it takes. By reallocating shelf space and prominent positions to premium SKUs, and broadening range at the premium end through additional flavours and pack sizes, brands create the conditions for shoppers to notice, engage with, and ultimately trade up to better products. We've seen some compelling category stories built on this logic alone: the product was always there; it just wasn't being seen.

‍NPD that taps into genuine emerging needs

Launching something new is easy. Launching something that actually connects with a real shopper behaviour or emerging audience is much harder — and the difference shows. Two standout examples from the past year: Vanish Turbo, which speaks directly to the quick wash occasion (now accounting for around one in five of all washes), and Nescafé Iced Concentrate, which meets a younger generation's desire for the iced coffee experience without leaving the house. Both extend the brand into new territory and premiumise the basket.

‍Premium brand extensions: adjacency or autonomy?

Where the premium segment of a category is growing, established brands are increasingly launching premium variants - but the strategic question is far from straightforward. Should the extension sit alongside the core range, leveraging parent brand equity to encourage trade-up? Or should it stand closer to the premium competition, where it can steal share on its own terms? We've seen results go both ways, and the answer tends to come down to the relative strength and scale of the core brand versus the premium space it's entering.Looking ahead, this momentum isn't slowing - but the shape of it is shifting. The challenger-brand premiumisation story (Mutti, Bold Beans and their ilk) will increasingly be told by established players who have the scale to do it at volume. The ones who get it right won't just launch a premium variant; they'll architect a genuine trade-up journey within their category.

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At VST, we’re always interested in (and trying to stay ahead of) the latest trends in shopper behaviour, category management, and technology. As you’ll see, the perspective from these leaders in the retail insights, data, and technology industries here cover a lot of disparate subjects.

From health trends, to AI-adoption, to online shopping and analytical skills, there’s a lot that we need to be mindful of in 2026.

What brings these perspectives together is that we need to move to a broader, more deliberate, insight-led decision making across the whole organisation (be that retailer, brand, or technology provider).

We’re very grateful to each contributor for sharing their perspective.

If any of these themes resonate with challenges you’re facing, or if you see the landscape differently, we’d like to hear all about it. At VST, we’re always looking to connect with people who are looking forwards in the retail industry.

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