Need to Know

• The mass merchandisers channel remains important to consumers for a multitude of reasons, including convenience and pricing.
• Overall, channel performance is mixed.
• A variety of beverage trends are impacting the channel, such as functional attributes and alcohol consumption.

“Performance has been mixed, however,” she says. “Dollar results have generally been more resilient than unit demand, reflecting continued price and mix effects as consumer buy more selectively. The strongest operators are benefiting from their scale, value positioning and omnichannel capabilities, while retailers without a clearly differentiated proposition face more pressure.”

Inflation has moderated from its earlier peaks, but consumers have not experienced a full return to their pre-inflation purchasing power, Lyons Wyatt notes.

“They remain highly conscious of the total cost of the basket and are managing affordability by buying less, adjusting pack sizes, shopping promotions and concentrating spending on the products that matter most to them,” she says.

Circana’s August 2026 Demand Signals showed retail food and beverage price/mix growth easing to 1.9%, while non-food consumer packaged goods (CPG) price/mix was still up 4%. At the same time, retail and food beverage volume declined 1.1% and non-food CPG units declined 1.9% in the latest four weeks.

“For mass merchandisers, that creates both opportunity and pressure,” Lyons Wyatt states. “Their value credentials and broad assortments are attractive in a constrained environment, but they must demonstrate value beyond simply having the lowest price. Consumers are also evaluating quality, convenience, pack-size flexibility and whether a product is worth allocating part of a limited budget to.”

Omnichannel shopping is impacting the performance of the mass merchandiser channel as well. Lyons Wyatt considers omnichannel to be an “increasingly important” growth engine for mass merchandisers because it lets them combine the immediacy and familiarity of physical stores with the convenience of digital ordering, pickup and delivery.

“The store is no longer only a shopping destination,” she states. “It is also a discovery environment, a fulfillment point and part of the retailer’s last-mile infrastructure.”

eCommerce continues to gain share across retail, and the food and beverage shopping shift increasingly sits at the intersection of mass merchandisers and eCommerce, Lyons Wyatt says.

“The implication is that online and in-store performance should not be viewed as competing businesses,” she notes. “Together, they determine whether the retailer captures the full shopper relationship.”

The most effective mass merchandisers are treating digital as an extension of the channel rather than a replacement for the store, Lyons Wyatt explains.

“Online platforms provide ease, replenishment and personalization, while stores provide immediacy, discovery, seasonal inspiration and the opportunity to encounter products the shopper did not originally plan to buy,” she describes. “That balance requires retailers to create distinct reasons to use each touchpoint. Digitally, that can include frictionless replenishment, personalized recommendations and convenient fulfillment.”

In stores, the Circana expert says it means strong displays, relevant innovation, cross-category merchandising and compelling seasonal or occasion-based experiences.

“Loyalty programs and retail media can then connect those environments, helping the retailer understand the shopper across the journey rather than within a single transaction,” Lyons Wyatt notes. “This is especially important because consumers are narrowing their shopping repertoires.”

The average number of unique channels visited during a 13-week period declined from approximately 5.6 in 2022 to 5.2 in 2026. Therefore, mass merchandisers need to earn a larger role with each household, not simply compete for an isolated trip, Lyons Wyatt says.

Several other consumer trends are shaping the channel. Lyons Wyatt points to the following:

• A broader definition of value: consumers want affordability, but also are judging value through quality, convenience, relevance and reduced waste.
• More deliberate spending: shoppers are reducing quantities or choosing different pack sizes before automatically abandoning preferred products.
• Income and demographic divergence: different consumer groups are recovering and spending at different rates, making a one-size-fits-all assortment or promotion strategy less effective.
• Health and wellness: consumers increasingly expect products to deliver benefits tied to hydration, protein, energy, digestion, weight management and overall well-being.
• Demand for newness: even cautious consumers will make room for products that offer a distinctive benefit, experience or permissible indulgence.
• Social and artificial intelligence (AI)-enabled discovery: discovery is moving upstream into creators, social platforms, search and AI tools, which means retailers must make product information and availability visible before the shopper enters the store.
• More at-home occasions: at-home eating, entertaining and self-care are creating opportunities to merchandise across departments rather than treating categories as isolated aisles.

“Beverages are particularly well-suited to mass merchandisers, because the category spans everyday replenishment, immediate consumption, entertaining, wellness and indulgence,” Lyons Wyatt says.

The most important trends, according to her, are the following:

• Functional hydration
• Protein and nutrition
• Energy with greater segmentation
• Reduced sugar and portion awareness
• Mindful drinking
• Flavor experience
• Premiumization alongside affordability

“The important operational implication is assortment complexity,” Lyons Wyatt notes. “Mass merchandisers need enough innovation to remain relevant, while using data and disciplined curation to prevent an expanding beverage set from becoming difficult for consumers to shop.”

Going forward, she says the next phase for mass merchandisers will be about becoming more useful to the consumer.

“Mass merchandisers will continue investing in eCommerce, fulfillment, retail media, loyalty and AI-enabled personalization, but the winners will connect those capabilities into one experience,” Lyons Wyatt explains.

She expects these priorities to move to the forefront:

• A more integrated omnichannel model, with stores playing a larger role in fulfillment as well as discovery
• Greater personalization, from digital recommendation to locally and demographically relevant assortments
• More precise value architecture, including good-better-best choices, pack-size flexibility, private brands and targeted promotions
• Faster identification and scaling of innovation, particularly products gaining momentum through social and digital discovery
• Stronger occasion-based merchandising, connecting food, beverages and general merchandise around needs such as entertaining, wellness, travel, sports and seasonal moments
• Leveraging AI to increasingly influence what consumers discover and consider, while retail media will help mass merchandisers connect brand investment with measurable shopper behavior

“The challenge will be maintaining trust and a compelling physical experience as more of the shopping journey becomes digitally guided,” Lyons Wyatt concludes.