Grocery retailers say they are ready to invest in technology that can drive growth, but tight margins, labor shortages and rising costs are shaping every decision, according to the 2026 Exploring Grocery Technology Trends survey conducted by LOC Software in collaboration with The Shelby Report and PDG Insights. The survey was fielded in September and October 2025 and drew responses from more than 100 managers, directors and executive leaders at operators ranging from small and mid-tier retailers to chains with more than 100 stores.
Survey sample and top challenges
About two-thirds of respondents (63 percent) named pricing, inflation and tight margins as their biggest challenge, followed by labor shortages and employee retention (57 percent) and rising operational costs (51 percent). In the back of store, 49 percent said labor shortages are their top inventory management challenge.
Grocery technology adoption and planned investments
Grocers reported progress on core technology: online ordering and mobile apps lead adoption at 74 percent, loyalty programs at 73 percent, self-checkout at 59 percent and home delivery integration at 58 percent. Looking ahead, the most common planned investment is artificial intelligence–driven product recommendations and personalized offers (28 percent), with electronic shelf labels close behind at 26 percent as retailers seek faster price updates and relief for overstretched staff.
Cape Cod Markets, a LOC Software customer for more than 20 years, recently implemented electronic price tags. “The POS, data and reporting abilities are responsible for our ability to grow and expand our business,” the retailer said. “Our latest investment in technology was electronic price tags, easily integrated to our LOC software. The payback in labor savings far exceeded our expectations.”
When choosing solutions, respondents cited return on investment (59 percent) and ease of integration (50 percent) as the two leading decision factors.
Loyalty programs and emerging tech readiness
Loyalty rewards remain the industry’s most common traffic driver, offered by 79 percent of respondents, but only 48 percent consider their program effective. Grocers are experimenting with point-based rewards (59 percent) and instant discounts or cash back (45 percent), indicating varied approaches to driving traffic and sales.
Three-quarters of respondents agree AI will impact operations in the next three to five years, and 35 percent already use AI to personalize offers. Robotics, smart carts and biometric payments are also on retailers’ radars. Fewer than 10 percent feel prepared to integrate emerging technology in the next five years.
LOC Software has developed retail technology for grocery retailers for more than 30 years. The company’s software suite, ThriVersA, includes point-of-sale, back office, e-commerce, self-service and loyalty modules. A link to get the full survey report is available here.
