Foodservice

In the quest to snap up consumers’ meal dollars from restaurants, Walmart is giving grocers a run for their money.

While grocers have long considered foodservice to be a competitive moat against Walmart, that may not be the case for much longer, especially as Walmart offers up a selection of fresh food in different preparation states and more flavors.

Long known for its low prices and no-frills store experience, the mass retailer is growing its eclectic roster of QSR partners for in-store restaurants, including hot dog and poke providers, and adding grab-and-go sections with prepackaged salads and sandwiches and even hot bars — one of which sports Indian cuisine. 

Online, Walmart is spotlighting a bevy of meal options like hot food, grab-and-go, heat-and-eat and ready-to-bake pizza on its app and website, Walmart U.S. President and CEO John Furner noted in a recent LinkedIn post.

On Walmart’s grab-and-go page, meanwhile, shoppers can find ready-to-heat soup, salad kits and chicken wraps. Items under the retailer’s Marketside brand include a sunflower bacon crunch chopped salad kit, a spinach dijon salad bowl and an Italian hero sub. 

Foodservice furthers Walmart’s goal of becoming a one-stop shop and comes at a time when economic uncertainty is pushing more consumers to shop at discounters and mass retailers.

Walmart’s combo of price and convenience is “a knockout punch” that it can wield against regional grocers trying to compete with the retailer, said Anne Mezzenga, co-CEO of Omni Talk. This can urge grocers to up their game to maintain an edge, sources said.

“One of the big advantages that regional grocers have over people like Walmart and Target and Costco is the fresh prepared foods. … They can really focus on having higher quality, because they don’t always have to play on price,” said John Clear, partner at consulting firm AlixPartners.

How Walmart is cooking up its meal options

The timing of Walmart’s foodservice efforts couldn’t be better for the retailer. As consumers grapple with an uncertain economy, those fretting about how much they are spending on meals may shift to Walmart. And while some may return to traditional grocers when their wallets are less squeezed, Walmart will likely convince many others to stick around, said Michael Orehowsky, director at West Monroe Partners and a former Giant Eagle executive. Orehowsky left the grocer in 2016 after more than 12 years in leadership positions with the chain’s convenience store, supply chain and operations divisions.

Walmart’s expansion of foodservice also comes as the retailer is looking for ways to bring in and keep higher-income customers, who tend to spend more than other shoppers, Clear said. 

Walmart’s work to cook up more foodservice options is happening alongside the retailer’s efforts to elevate its in-store and omnichannel experiences. The company is currently rolling out its Store of the Future concept to more than 150 locations.

The first new-construction location under that concept opened in Cypress, Texas, in April 2025, and features a variety of service options like auto care, a vision center, a wider assortment in key categories and QR codes throughout the store to help shoppers access digital tools. The store offers an array of fresh prepared food items in areas like a Hispanic bakery section and a sushi station. It also features a fresh tortilla maker and a Dunkin’ outpost. 

Walmart Canada’s flagship store, which was recently renovated to follow the Store of the Future concept, offers a hot bar surrounded by other food options. At the hot bar, customers can find a variety of regionally inspired dishes such as eight pieces of chicken wings, two pieces of jerk chicken legs, curry chicken and Jamaican oxtail, according to an Omni Talk video. Mezzenga, who toured the store in early 2025, said the hot bar offerings were reflective of customer demographics in the area.

The main level of the two-story location also offers heat-and-eat options, a made-to-order sushi bar, bakery, and prepackaged ready-to-eat choices, giving customers a range of meal options, Mezzenga said.

“If this is a place where I'm popping in regularly for hot food, there are so many options and opportunities to get everything else that you could want or need in that one trip,” she said. It’s a “very elevated experience” that puts it on par with Wegmans, the East Coast grocery chain known for its broad array of prepared food options, Mezzenga said.

While Walmart is displaying a wide array of new and improved foodservice options, it’s unclear how, when and where the company will roll these offerings out — although local news reports of store openings and remodels indicate that Walmart will continue rolling out more meal options as it updates and debuts locations, including the Cypress, Texas, store and a remodeled Neighborhood Market on Long Island. 

Consumer trust is a key hurdle for Walmart’s foodservice push, Clear said. The retailer traditionally lags consumer trust scores in fresh and quality compared with strong regional players like Publix, Wegmans or Sprouts Farmers Market, which means Walmart will have to win over skeptical shoppers in order to grow this business. 

“I think trying to convince customers that the quality of [a Walmart meal] is better than what you're used to at other places is going to be a challenge for them,” Clear said. “What they’ll probably need to do is a combination of convenience and price” to incentivize customers.

Still, Walmart has made “a lot of strides” over the last decade with consumers’ perception of quality, said Orehowsky.

How grocers can craft a recipe for success

While Walmart has size, scale and a fail-fast mentality, “high-performing” regionals have a clear advantage when it comes to freshly made meal options, Clear said. 

Regionals better know the communities where they operate and can roll out creative options to meet their shoppers’ needs, Clear said, giving the examples of regional and seasonal “menus.” 

“[Regionals] pretty much are always going to be able to have a broader, more nimble and more tailored fresh assortment in these freshly made salads and sandwiches than Walmart because they’ve got more equity to experiment with tastes, to experiment with premium-style products, to experiment with different approaches and seasonal offerings,” he said.

While it’s hard for traditional supermarkets to justify higher prices on commodity items, they can hold the line on higher prices for discretionary items that compete on quality, taste and assortment, Clear said. Popularity and virality — think Pub Subs and Sprouts’ deli sandwiches — can also play key roles in driving loyalty to regionals, he said.

Regionals like Wegmans and Publix have been relatively strong in providing options for different dayparts and different family sizes, Clear said, noting that he expects that differentiation to continue.

Traditional supermarkets can hook consumers with a foodservice item they are known for, like fried chicken, Orehowsky said, noting that sampling can be a prime way to introduce customers to items. Scratch-baking certain baked goods or offering in-house butchers can also attract customers and help differentiate from Walmart, he said. 

While some grocers like Whole Foods Market, Publix and Wegmans have made fresh prepared food a key part of their reputations, other traditional grocers don’t have a solid grasp on how to serve up differentiated foodservice offerings.

“I still go into a lot of regional grocers, and yes, they have a hot bar, but it’s a lot of the same things that we’ve seen in hot bars for years,” Mezzenga said. “You're not seeing them really look at who their demographic is and catering to those specific dishes,” such as vegetarian options if the store has a large Indian shopper cohort. 

Traditional grocers can also provide a range of meal options with prices corresponding to how ready the food is to eat. Ready-to-eat meals can command higher prices, for example, than take-and-bake items.

“I think the best thing that the regional players could do is just really try to lock in their strategy when it comes to what their heat-and-eat or takeaway food offerings are, and adapt that so that they are truly serving each environment that they’re in and the customers that shop that store,” Mezzenga said.

Even with the shift to online and omnichannel, customers still care about the in-store experience, and store workers can play a key role in helping shoppers find quality items, Orehowsky said. Walmart stores still have a “warehouse” feel, giving traditional grocers an advantage in providing an ideal in-store experience, he said.

Grocers such as Publix, SpartanNash and Schnuck Markets have embarked on remodeling initiatives that include foodservice enhancements, while others have leaned into opening innovative food-focused formats, like Northgate González Market’s immersive Mercado González and Save A Lot’s Hispanic grocery store concept Ahorra Mucho. 

Grocers shouldn’t underestimate the importance of their staff, Orehowsky said. With training on product quality and freshness, workers can educate consumers and inspire their purchasing decisions by helping them find relevant items, Orehowsky said. Store workers should also have time and opportunities to interact with consumers to help create a memorable shopping experience, he added.

Grocers should also stress to workers that they are “building that culture within the store that we're that community store. We're feeding the families that you know around us,” Orehowsky said.

At the start of 2025, Hy-Vee announced plans to transition all its in-store restaurants to a revamped Market Grille concept, effectively ending Wahlburgers’ reign in the grocer’s locations. 

This next phase of Hy-Vee’s in-store restaurant operations, which will take place throughout February 2025, includes shuttering all 79 Wahlburgers locations. Post-transition, Hy-Vee will operate 221 Market Grille and Market Grille Express locations across its grocery stores.

This isn't the first time the Midwestern grocer has refreshed its in-store restaurant concepts.

In 2020, Hy-Vee announced switching over 21 Market Grille locations to Wahlburgers restaurants and, for nearly five years, operated both restaurant concepts across its store fleet, the spokesperson said. 

All in-store restaurants will introduce new menus, bringing back customer favorites from the original Market Grille menu and offering lower prices than Wahlburgers’ Hy-Vee menu, a Hy-Vee spokesperson said.

The new Market Grille menus include breakfast, lunch and dinner options. Popular items, including Market Grille burgers and hash browns, will return, while offerings like wings and wontons remain. The spokesperson noted that the current menus’ “selection wasn’t popular among shoppers” for both restaurants. 

The new menus will also be more affordable, with a price point between $5 and $14, the spokesperson said.

The new breakfast menu will roll out to all in-store restaurants by Feb. 4, 2025, followed by the updated lunch and dinner menus in mid-February of the same year. 

Hy-Vee does not plan to lay off employees as part of this transition process, adding that staffers are currently being trained on the new menu. The grocer is also not closing any stores during the transition period, which will include bringing in new signage and decor during the store’s “off hours,” according to the spokesperson.

Nearly 30% of Long Island’s population is Italian-American — and there’s a good chance all of them know Uncle Giuseppe’s Marketplace. 

Uncle Giuseppe’s has been a staple specialty grocer on Long Island since 1998 and, over the past 25-plus years, has opened 11 stores in the greater New York and New Jersey areas with a 12th reportedly slated to open in 2026. 

The stores’ shelves are well stocked with a variety of Italian staples, including sauces, pasta, fresh produce, cheeses and classic pastries — many of which are Uncle Giuseppe’s own brand. And, like any good Italian, Uncle Giuseppe’s also offers an assortment of hot, home-cooked-style meals. 

Grocery Dive visited the grocer’s Port Jefferson, New York, location on Long Island to see how the specialty chain leans into its Italian roots to dish up unique offerings. 

Just like Mama made

Hot-and-ready meals are the first things Uncle Giuseppe’s wants its shoppers to see — and smell — when they walk through the door. 

Numerous display cases hold prepackaged hot-and-ready meals and self-serve counters offer classic Italian-American favorites like baked ziti, sausage and peppers, and chicken parmesan. In all, Uncle Giuseppe’s prepared food department includes more than 130 dishes, according to its website. 

Along the wall headed toward the back of the store at Uncle Giuseppe’s Port Jefferson store, shoppers will find a variety of pizzas, calzones, stromboli, flatbreads, garlic knots and sandwiches. The station also allows shoppers to build their own chopped salad starting at just under $10. 

All Uncle Giuseppe’s stores have a pizzeria that serves pies made with hand-stretched dough and the grocer’s own sauce as well as its freshly made mozzarella.

As customers make their way along the perimeter of the Port Jefferson store, they’ll come across an extensive deli counter with cured meats, cheeses and other prepared offerings. Along the store’s back wall is a butcher counter and a fresh seafood counter. 

In another corner of the store is Uncle Giuseppe’s “pasticceria,” which roughly translates to “the art of pastry.” Cakes, muffins, breads, cookies and a slew of other pastries sit behind the counter’s glass case, on a display wall of bread and on the tables of prepackaged baked goods. The grocer’s website notes all of its baked goods are handmade from scratch. Customers can even watch Uncle Giuseppe’s bakers make donuts in-store. 

But the sweets go beyond baked goods. Located on the store’s center floor is a gelato, chocolates and candy station equipped with three chocolate fountains serving up white chocolate, milk chocolate and dark chocolate. 

Essential ingredients

While Uncle Giuseppe’s flexes its premade options, the grocer also knows it’s marketing to Italians — and Italians like to cook.

The specialty chain carries a wide variety of ingredients from different brands, but its private label assortment is what truly stands out as shoppers walk the aisles. Uncle Giuseppe’s makes different cuts of fresh-cut pasta daily such as Rigatoni, Fettuccine and Cavetaelli, according to the grocer’s website, noting it also sells gluten-free pasta. 

And of course, what is pasta without sauce? Uncle Giuseppe’s has a wide selection of homemade sauces under its private brand, including marinara, marsala, fresh basil pesto, fra’ diavolo, filetto di pomodoro and more.

Sausage pairs well with many pasta dishes, and Uncle Giuseppe’s makes its own Italian sausage in-store daily. Shoppers can take their pick from dozens of varieties, including the grocer’s signature cheese and parsley sausage. 

The Italian market chain makes its own fresh mozzarella, which has followed a recipe from Salerno, Italy, ever since it opened its first marketplace in East Meadow, New York, in 1998. 

The grocer also sells a wide array of spices and seasonings under its name brand.

Beyond Italian borders

Uncle Giuseppe’s is nothing if not Italian, but there is one counter that may surprise shoppers. 

Situated front and center at the Port Jefferson location is a sushi counter that has grown into a staple at Uncle Giuseppe’s stores. 

The sushi is hand-rolled fresh throughout the day and includes California rolls, spicy tuna rolls and rainbow rolls. 

And while Uncle Giuseppe’s fresh, homemade mozzarella may be a focal point of the market’s offerings, the grocer also offers its customers a wide assortment of cheeses. Hundreds of domestic and international cheeses are available, and the grocer’s staff is trained to help shoppers sort through the selection.

Visuals Editor Shaun Lucas contributed to this story. 

SpartanNash announced in October 2024 the reopening of its Family Fare in Sparta, Michigan. The store marks the second pilot location for the company’s grocery store modernization strategy.

SpartanNash said it lowered prices on more than 6,000 products to reinforce its focus on value for shoppers.

SpartanNash’s store modernization strategy focuses on fresh products, convenience and value. The company said that the store in Sparta refines key offerings from the company’s first pilot store in Holland, Michigan, which opened in August. 

The Sparta store has a layout designed to highlight the fresh produce, floral and bakery departments, according to the announcement. The store features items that have been “popular” at the Holland pilot such as:

• $20 healthy meal kits that take 20 minutes or less to prepare,
• a “chef-driven” grain bowl program,
• curated specialty cheeses,
• fried sandwiches,
• a beef jerky bar,
• a candy station and
• “flavorful” mac and cheese options.

SpartanNash said that insights gained from the two pilot locations will inform future Family Fare remodels.

“Our goal with this project long-term is to continue listening closely to both our shoppers and Associates, evolving and shaping the future of grocery shopping with solutions that truly meet the needs of the communities we serve,” SpartanNash Executive Vice President and Chief Merchandising Officer Bennett Morgan said in the announcement. 

The store pilots come at a time when SpartanNash is trying to improve its financial performance. During its second fiscal quarter of 2024, SpartanNash recorded a decline in net and comparable-store sales and saw both its retail and wholesale operations lose ground for the third quarter in a row. CEO Tony Sarsam told investors in August 2024 that the company’s “merchandising transformation” is starting to pay off.

SpartanNash runs more than 140 brick-and-mortar grocery stores primarily under the Family Fare, Martin’s Super Markets and D&W Fresh Market banners, as well as pharmacies and fuel centers.

As they look to improve their foodservice offerings, supermarket chains have invested in their pizza offerings to take advantage of shoppers’ desire for the food. From drawing attention to their in-store pizza ovens to partnering with local restaurateurs that specialize in the food, here’s how food retailers are looking to get a bigger slice of pizza sales.

Frozen pizzas have lately moved off grocery store shelves at a solid clip. Shoppers spent $7.4 billion on frozen pizza alone during the year that ended in July 2024 — up just under 1% year over year and more than on frozen breakfast foods, snacks or baked goods — according to data collected by Circana and published by 210 Analytics.

Frozen pizza commanded $549 million in sales during July 2024, up just under 1% from the previous year, and the number of units sold grew by nearly 2%, the data shows. Consumer interest in frozen pizza was up in July 2024 even as sales of other types of frozen meals, including entrees and breakfast items, lost ground in sales.

Globally, frozen pizza sales jumped 11% in 2023, due in part to retailer promotions, according to figures from Market.us Media.

By comparison, consumers spent $85 million on deli-prepared pizza in July 2024, up about 4% year over year, according to Circana data cited by 210 Analytics. Spending on deli prepared pizzas came in at $1.3 billion for the year that ended in July, an increase of 6.7%, Circana found.

Standout grocers

Dishing up pizza partnerships

Giant Food has a deal to sell pizzas from Maryland chain Ledo Pizza in some of the Mid-Atlantic supermarket chain’s stores. Shoppers have the option of taking the food home in a box to warm up in their own ovens or asking an employee to heat up a pizza to eat on the spot, a reflection of the Ahold Delhaize-owned chain’s efforts to dedicate more space in its new stores to ready-made meal choices. 

In July 2024, meanwhile, Mt. Gatti’s Pizza unveiled plans to bring 92 pizza shops to Walmart stores in Texas, Louisiana, Oklahoma and Kentucky, a move the Texas-based chain said would nearly double its footprint.

Destination pizza

Specialty grocer The Fresh Market has positioned its stores as prime pizza destinations, announcing in May 2024 that it has rolled out a new selection of “authentic Neapolitan-style pizza” that it said would make mealtime easier for customers. The retailer’s chefs designed the recipes, which include BelGioioso cheese, Italian tomatoes grown from “fertile volcanic soils” and crusts made from “highly esteemed Neapolitan flour.” 

The Fresh Market’s focus on pizza comes as the chain looks to build ties with customers by highlighting its prepared food options. Several of the chain’s stores include “an expanded kitchen focus” on dinner items that includes a range of restaurant-quality options, including hot and freshly prepared pizza.

Serving up a slice of deals

Harris Teeter put a spotlight on pizza when it announced in May 2024 that it would include pizza in its “$5 Meal Days” program, which it positioned as a way to attract budget-minded shoppers reeling from the rising cost of eating out. On Mondays, customers could get whole cheese and pepperoni pizzas — freshly baked and “take & bake” — as part of the program.

What's trending?

Grocers have looked to take advantage as people stock up on frozen pizzas. In late 2023, Albertsons rolled out premium wood-fired pizzas imported from Italy under its Signature Reserve private brand.

In early 2024, Giant Eagle struck a deal with The 1870 Society, an organization that supports athletics at The Ohio State University, under which the chain said its Ohio stores would sell frozen pizzas featuring student athletes who play for the university.

In keeping with demand by shoppers for foods they can store at home easily and get on the table quickly, SpartanNash included frozen pizzas in its “Finest Reserve by Our Family” private label line, which launched in February 2024. The brand centers on items that include “fresh and authentic ingredients,” according to SpartanNash.

Grocers have tried their hand at operating restaurants, eager to add some culinary pizzazz and draw new customers to their stores. But the recipe for success has proven elusive.

Kroger in spring 2025 shuttered two of its three Kitchen 1883 restaurants and in 2023 closed down its ghost kitchens, which served meals to digital shoppers. Regional grocers like Bristol Farms and defunct startup Dom’s Kitchen & Market have closed stores that featured elaborate dining concepts, while Hy-Vee has gone back and forth on its restaurant formats over the past few years. 

Pair these troubles with their laser focus on efficiency, and grocers’ appetite for opening and running restaurants doesn’t appear to be very robust right now. 

But there’s one independent operator that’s bucking this industry narrative. Town & Country Markets, which operates six stores in the Puget Sound region of Washington state, has opened three Field House restaurants since 2024, serving up fresh-made burgers, salads, pizzas, beer and other fare across breakfast, lunch and dinner. Each location averages 3,500 diners per week — well above the 2,600 Town & Country anticipated would show up — President and CEO Ryan Ritter said.

Many of those diners are discovering the retailer for the first time when they visit, and they’re often shopping for groceries when they stop in for a burger and a beer. Town & Country plans to put a Field House in all of its locations over the next two years or so, and Ritter said any new store will have the concept in some form.

When Town & Country opened its first restaurant, “we had double-digit growth in grocery sales, and that’s continued to grow,” he said. “These are truly additive sales” throughout the store. 

What’s Town & Country’s secret? No one thing accounts for Field House’s successful run so far, Ritter explained. Rather, it’s many things — and none of them have been easy to implement, he emphasized.

One move that’s paid off is fully integrating the restaurant concept with Town & Country’s stores. The Field House inside the grocer’s Mill Creek, Washington, location sits right next to the foodservice department and has a spacious seating area that’s available for customers of the restaurant as well as anyone who grabbed a meal from the foodservice or deli departments. The grocer also promotes Field House as a market-to-table restaurant, with all ingredients in the dishes it serves sourced from the store. Seasonal dishes often highlight produce and other items prominently displayed on the retail floor.

“If the asparagus [the store has] is amazing, you’re going to find a pizza with asparagus,” Ritter said. “We recently had asparagus and burrata. And the cashiers are going to talk about it.”

Other grocers have failed with restaurants that were too detached — both physically and conceptually — from the stores where they operated, Ritter noted. In the early stages of developing Field House, he visited other grocers that had opened restaurants and found that many were cafeteria-style establishments that were efficient but uninspiring.

Ritter belongs to a share group with executives from other independent grocers around the U.S., and some who had tried opening restaurants advised him not to do the same.

“They all tried the cafeteria concept. They wanted to make it as simple as possible,” he said. “And I was like, no, no, we’re gonna create a restaurant.”  

Town & Country hired a restaurant design firm to design its Field House locations. To make sure its menu was up to snuff, the company enlisted local restaurateur Ethan Stowell as an advisor. 

Stowell, whose company operates more than a dozen restaurant concepts, helped develop a variety of familiar dishes that have a slightly upscale flair, including a house-smoked brisket sandwich, farro steak salad and Nutella pancakes. He also advised Town & Country on the nuts and bolts of operating a restaurant and allowed Field House’s kitchen staff to tour his restaurants and observe how the back of house operated. 

Field House’s connection with Stowell gave the restaurant credibility and attention from the get-go. “We were getting noticed in restaurant publications because Ethan was associated with us,” Ritter said.

Getting the balance of labor right has also been key for Field House. The concept doesn’t have a traditional wait staff — customers order at the main counter and get dishes brought to them — but it does have line cooks, kitchen managers, dishwashers and other core restaurant roles that Ritter says are costly but necessary to create a dining destination.

Running a restaurant is a whole different ballgame from running a grocery store, Ritter said, and it’s taken Town & Country time to get up to speed with the help of professionals like Stowell. Even details like getting the restaurants listed correctly on Google Maps are important, he said.

Town & Country has also had to think differently about how it promotes Field House.

As a traditional grocer, “we’re really good about building weekly ads, but it takes a whole different way of connecting with guests, like really embracing social media,” to make the restaurant concept click, Ritter said.

Ritter’s goal with Field House isn’t to make each restaurant profitable. Rather, he wants the concept to improve the shopping experience by providing another type of meal option that people are looking for. 

It’s also an effective way to stand out from other grocery stores.

“I’ve never had the cheapest prices down the aisle. It’s impossible … I can’t buy at the same volume as a Walmart or a Kroger. We have to differentiate ourselves in really creative, unique ways,” Ritter said.

Later this year, members of the grocery share group Ritter belongs to are coming out to pay a visit. After writing off the idea a few years ago, they’re now willing to take another look and see if a restaurant could work in their stores, as well, said Ritter.