The Execution Gap in Grocery Is Getting Wider

The Hardest Problem in Retail

Every grocer knows the problem. A product shows as in stock. A customer cannot find it. An associate spent the last hour on a manual count that was already wrong before it was finished. A supplier field rep drove two hours to visit a store and learned about a shelf gap three days after it opened. None of this is new. What is new is that Walmart is investing to eliminate the conditions that make it possible.

The goal, as Greg Cathey, Walmart’s Senior Vice President of Transformation and Innovation, described it in Walmart’s October 2025 announcement, is to solve “one of the hardest problems in retail, knowing exactly what we own and where it is at any given moment.” The investment behind that goal is significant. Walmart launched what its technology partner Wiliot described as the largest deployment of ambient IoT sensors in the history of retail, with millions of battery-free sensors rolling out across all 4,600 Supercenters and Neighborhood Markets and more than 40 distribution centers, tracking an estimated 90 million pallets in real time by the end of 2026, according to CNBC’s reporting. Supply Chain Dive reported that the sensors eliminate manual inventory tracking tasks entirely and surface automated alerts so associates can act on issues rather than discover them.

That infrastructure feeds into a set of AI tools Walmart announced in June 2025 for its 1.5 million U.S. store associates, described on its corporate newsroom as designed to “eliminate friction, simplify actions and make work more efficient.” CIO magazine reported that the AI-powered task management system has already reduced shift planning time for managers from 90 minutes to 30, and is being expanded beyond overnight stocking to other responsibilities across the store floor. Walmart is simultaneously deploying digital shelf labels across 2,300 stores and has committed $520 million to AI-driven automation for pickup and delivery centers through an expanded relationship with Symbotic, according to McMillanDoolittle’s December 2025 reporting.

The most recent layer is Scintilla In-Store, introduced by Walmart Data Ventures on February 23, 2026. Retail Dive reported that the platform, built on technology Walmart acquired in 2022, gives supplier field representatives access to the same live item and modular data that store associates use, so gaps can be caught and closed during a store visit rather than logged afterward. Pamela Stewart, North America Chief Customer Officer of Retail at The Coca-Cola Company, said in Walmart’s announcement that the platform “provides real-time inventory visibility and equips our representatives with advanced tools, enabling them to work more efficiently and make data-driven decisions during every store visit.” Walmart Data Ventures indicated that AI-driven task prioritization is planned for future updates.

What these investments collectively describe is not a set of technology upgrades to existing processes. It is a systematic effort to give every person touching the store, whether associate, manager, or supplier field representative, a shared and accurate real-time picture of what is happening on the shelf, and the guidance to act on it before the failure reaches a customer.

Kroger’s Investments, and Why the Foran Appointment Matters

Before Greg Foran took over as CEO in February 2026, Kroger had already been building operational infrastructure of its own. Supermarket News reported on the company’s AI-driven task management and store management applications built with Google Cloud and Deloitte, which give night crew managers real-time visibility into incoming merchandise volume, staffing, and stocking needs, and dynamically reprioritize associate activities based on live data. In January 2026, Kroger announced an expanded Google Cloud partnership to deploy Gemini Enterprise for Customer Experience nationwide. AIM Media House reported in November 2025 that AI-driven batching tools were already reducing associate walking distance by 10% in high-volume stores. CFO David Kennerley said on the company’s Q1 2025 earnings call, as reported by CIO Dive, that a dedicated AI shrink tool deployed through Kroger’s 84.51 data division now gives the company “much better visibility of the inventory we’ve got in store,” including expiration tracking and product-level insights. On the Q2 2025 earnings call, then-interim CEO Ron Sargent told investors the results were measurable: “shrink improvements and faster fulfillment,” according to Grocery Dive.

The Foran appointment, announced February 9, 2026, added a dimension that technology investment alone cannot provide. Kroger’s stock rose approximately 7% on the day, the company’s first external CEO hire in 143 years, as reported by Grocery Dive. Evercore ISI analyst Michael Montani said in published commentary that Foran “brings instant credibility to Kroger after his demonstrated success turning around Walmart U.S. store operations.” Neil Saunders, Managing Director at GlobalData Retail, wrote in an email reported by Grocery Dive that Foran has “a very strong operational mindset, which will be helpful for rebuilding the e-commerce and logistics side of the chain, both of which have been neglected.”

Foran ran Walmart U.S. from 2014 to 2019, during which Kroger’s own announcement credits him with delivering 20 consecutive quarters of comparable sales growth. Modern Retail reported that he visited nearly 200 store locations in his first two years, with a consistent focus on in-stock rates, fresh assortment, and execution discipline at the store level. He is the executive who built the operational culture that made Walmart’s stores the standard the rest of the industry measures itself against. He is now running the largest conventional supermarket chain in the country with a mandate to do it again.

On Kroger’s Q4 earnings call on March 5, 2026, Foran described spending his first month touring stores, distribution centers, and manufacturing facilities. Progressive Grocer reported that he identified technology and workflow processes as specific targets for removing what he called “unproductive costs,” with savings to be redirected into prices and the customer experience. The earnings call transcript published by Insider Monkey shows CFO Kennerley telling investors Kroger was “investing aggressively” in technology and AI in 2026, with capital expenditures planned between $3.8 billion and $4 billion. Foran also described potential for center-store assortment optimization as part of improving what he called the ecosystem across shelf availability, planograms, and store-based fulfillment, according to the Daily Political’s reporting on the call.

Why the Gap Is Widening

The execution problem Walmart and Kroger are investing to eliminate is not new to grocery. The gap between what a store’s system says is on the shelf and what a customer actually finds has always existed. What is changing is the rate at which the two largest operators in conventional grocery are closing it within their own stores, and what that means for everyone operating on the other side of that divide.

IHL Group published research in September 2025, reported by both Chain Store Age and Convenience Store News, estimating that inventory distortion, the combined cost of out-of-stocks and overstocks, costs the retail industry $1.73 trillion annually worldwide, representing 6.5% of global retail sales. North America accounts for $415 billion of those losses. Fewer than one in four retailers have successfully deployed AI and machine learning in the areas most affected by inventory distortion. Those who have are achieving sales growth 2.3 times higher and profit growth 2.5 times higher than those who have not, according to the same research. Greg Buzek, President of IHL Group, described the dynamic in the company’s September 2025 announcement: “The data shows a clear bifurcation emerging.”

Research from the ECR Shrink Group, based on a three-year study conducted with seven of Europe’s largest retailers covering approximately one million SKUs across roughly 100 stores, found that about 60% of retail inventory records contain inaccuracies. Correcting those inaccuracies generated sales increases of 4% to 8% across all participating retailers, with the largest recoveries coming from high-volume items, precisely the category that matters most in grocery.

The performance gap IHL describes is not a future condition. It is an existing and measurable differential between retailers who have made this investment and those who have not. Walmart is closing the execution gap across 4,600 stores with what Wiliot calls an unprecedented deployment. Kroger has the executive running its operations whose defining professional achievement was closing an execution gap of exactly this kind, and who has spent his first month identifying the specific workflow and technology inefficiencies he intends to address. The competitive standard in conventional grocery is moving, and the pace of that movement is the relevant signal for every operator watching from outside it.

What Operators and Brand Teams Should Take From This

For regional and independent grocery operators, the IHL finding is the relevant frame. The performance gap between retailers deploying AI-driven inventory management and those relying on traditional approaches is already visible in sales and profit growth rates. Operators who have deferred this investment are not holding position against a stable baseline. They are losing ground against one that is itself accelerating.

For CPG brand teams, Scintilla In-Store changes the practical expectation for field execution at Walmart. When supplier representatives work from the same real-time item and modular data that store associates use, the assumption that shelf issues will surface during periodic visits no longer holds. The platform is built for issues to be identified and resolved during the visit itself. Brand teams whose field execution models were designed around scheduled visits and manually compiled performance reports are operating on assumptions that Walmart’s store infrastructure is no longer organized around.

The ECR data frames the opportunity clearly. Correcting inventory inaccuracies at grocery scale generates sales increases of 4% to 8%. For operators and brand teams willing to examine those findings against their own numbers, the investment is not a cost to be weighed against thin margins. It is a margin question in itself, and both Walmart and Kroger have already answered it.

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Mike Graen

With 42 years of experience working for Procter & Gamble, Walmart, and CROSSMARK, Mike Graen has seen the retail industry from every conceivable angle.

From helping develop what would become Retail Link to investigating and leveraging the potential of shelf-scanning robots and RFID tech in stores, Mike has made a career out of using technology to solve business problems.

Mike partners with retailers, consumer product companies, and solution providers from all over the world, leveraging his reach, relationships, and influence to help teams deliver product availability while driving strategic alignment between retailers, their supplier partners, and the solution providers who enable them both.