More Grocery Suppliers Are Raising Technology Budgets Than Expect Them to Pay Off

Two findings sit a few lines apart in FMI’s new industry benchmark. Eighty-three percent of grocery suppliers expect to increase their technology investment in 2026. Sixty percent expect those investments to improve their bottom lines. The 23-point spread between commitment and conviction is the most revealing number in the report, and the first wave of trade coverage printed both figures without pausing on the distance between them.

FMI, The Food Industry Association, released The Food Retailing Industry Speaks 2026 on Tuesday, the 77th edition of its annual operational and financial benchmark, drawn from a survey of U.S. and Canadian food retailers, wholesalers, and suppliers fielded in February 2026, completed by 70 companies, supplemented with eight public company 10-K filings, and representing more than 42,000 stores. The backdrop it documents is unforgiving. Roughly 90% of responding retailers and suppliers said international trade policies and tariffs hurt their businesses in 2025, food retail profit margins averaged 2.1%, and roughly 11% of food retailers posted losses. FMI President and CEO Leslie Sarasin described consumers as “increasingly sensitive” to both the cost of food and their families’ nutritional needs, and framed the industry’s answer as investment, not retrenchment.

The investment is real, and it is accelerating fastest on the supply side. Suppliers dedicated 3.3% of sales to technology in 2025, well above the 1.9% retailers spent. FMI’s own State of Technology report, published in September 2025, put the 2024 figures at about 1.5% for suppliers and 1% for retailers. The two studies are separate FMI research efforts, so the comparison is not a single trend line, but read together they show spend rates on both sides roughly doubling in a year, with suppliers holding their lead throughout.

The Supplier Technology Line No Longer Buys What It Used To

FMI’s survey does not break out what sits inside that 3.3%, but the composition of a supplier technology budget has visibly changed, and the change is observable across the industry’s largest customers. Walmart’s Data Ventures arm sells suppliers subscriptions to its Scintilla insights platform, extended it into stores with a field-team app this February according to Retail Dive, and opened its data feeds to suppliers’ agency and technology partners in April, as Digiday reported. Ahold Delhaize’s retail media arm announced Edge, a platform Grocery Dive reported would bring the grocer’s on-site, off-site, and in-store advertising channels into a single buying environment for CPGs beginning in early January. Each of these is a capability a supplier can put to work. Each also carries a price, and a supplier serving five or six major retailers is now buying into five or six data and media ecosystems at once. In this reading, that multiplication, more than any single tool, is the engine behind a spend rate that doubled in a year, though the survey itself does not say so.

The pattern extends to artificial intelligence, where FMI’s State of Technology research found adoption running at 93% of suppliers against 47% of retailers. The 46-point spread reads less like retailer reluctance than like deployment physics. Suppliers adopt AI first where friction is lowest, in forecasting, content generation, and analytics that run on clean inputs from a desk. Retailers have to deploy it into the physical store, where lighting, planogram drift, shrink, and a workforce in motion all get a vote, and where a model that performed beautifully in the lab meets a freezer door with glare on it. That is an operator’s interpretation, not an FMI finding, but it explains the gap better than any theory about ambition.

What Separates the Confident 60% From Everyone Else

The 23-point spread between suppliers raising budgets and suppliers expecting returns is where the operator’s read matters most. The survey does not explain it, and experience suggests it does not need to. The gap is where pilot purgatory lives: proofs of concept that never earn their way out of the test stores, platforms bought before anyone defined the decision they were supposed to improve, and capability acquired a year ahead of the organization’s readiness to run it.

What separates the confident 60% is rarely the technology itself. It is that they can answer three questions before the contract is signed, and the questions have teeth. First, is it real, meaning has it survived a full quarter at production scale in someone’s stores, because a supervised week in three locations is a demo with better lighting. Second, does it produce decision-grade data, which has a practical definition: would a replenishment planner change an order based on it? A shelf-reading system that is 90% accurate sounds impressive until an automated system starts writing orders against the other 10%. Third, is the operation ready, meaning the output has a named owner, a process actually changes when the data arrives, and someone has planned for the exceptions instead of the demo case. Suppliers who clear all three tend to land in the 60%. Suppliers who clear none of them fund the gap.

Company size changes the stakes of getting this wrong. A top-tier CPG spreading 3.3% of a large revenue base across a portfolio of tools can absorb a failed bet as tuition. A mid-market supplier hitting the same benchmark is making fewer, larger wagers, where one wrong platform decision consumes the year’s entire technology case and the credibility that funded it. FMI does not segment the data by company scale, so this too is a judgment call, but it is the difference between reading 3.3% as a benchmark and reading it as a budget.

The report leaves the industry one more number to carry into next year. Among retailers, 82% are experimenting with in-store technologies aimed at the customer experience, which means the volume of unproven capability is rising on both sides of the buyer’s desk at the same time. Speaks names tapping new technologies and building business resiliency among the industry’s five stated priorities for the year ahead. Next July, the number that will show whether the discipline caught up with the spending is not the spend rate at all. It is whether that 60% moved.

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Emil Martinez

Emil Martinez is an advisor on emerging retail technologies and co-host of Retail Ready on Conversations On Retail. His three decades in retail technology span the measurement world of ACNielsen, IRI, NPD, and the standards work at GS1, more than a decade leading Tata Consultancy Services' global retail consulting practice, and most recently serving as Chief Executive Officer of Badger Technologies.

He has sat on the supplier side, the retailer side, and the data side of some of the most demanding relationships in retail, and he has spent years turning AI and computer vision into results on the store floor. His work centers on a single question: whether a technology is real, whether its data is worth a decision, and whether the operation is ready to run it.