Winning in Nonfoods Starts with Closing the Perception Gap

Nonfood categories generated $5.6 billion in new sales last year, and grocery retailers need to have a nonfoods strategy to capture the sales. 

By: Doug Baker, Vice President, Industry Relations, FMI 

When we published FMI's The Power of Nonfoods at Retail 2026, we established that nonfoods represent a $310 billion market with real, recurring demand. We previously examined how ecommerce and private brands are reshaping where shoppers spend. Now the question is practical: What does it take for a grocery retailer to win in nonfoods? 

The value perception problem is real, and addressable 

Ask shoppers why they do not buy nonfoods at the grocery store, and the answers are consistent across all 12 categories surveyed in the FMI report. Cost. Affordability. Value. Those three words appear at the top of almost every "why not grocery" response. 

For OTC medications, cost is cited by 50% of shoppers who did not purchase at a grocery store or supermarket. The list includes the categories of oral care (49%), vitamins (47%), household cleaning (45%) and shaving (43%). Roughly half the shoppers who skip grocery retail for these categories do so because they believe they will find a better price somewhere else. 

Note the important nuance: These same shoppers also list affordability and value as the primary reasons they choose the retailer where they do shop. Value is not driving them away from grocery in principle. It is driving them away in practice, because mass retailers, club stores, dollar stores and online channels have built stronger reputations for it. 

Closing that gap does not necessarily mean being the lowest price in the market. It means being competitive enough that shoppers stop assuming grocery is not. 

Gateway categories deserve more attention than they get 

Not every nonfood category carries equal strategic weight. Some function as gateway categories, products that build the habit of buying nonfoods at grocery and pull incremental spending in their wake. Household cleaning, oral care, hair care and pet food all qualify. Each has high shopper penetration, high purchase frequency and overwhelmingly planned purchase behavior, according to the FMI research supported by Circana data. 

When grocery wins those baskets consistently, it earns the right to expand. Shoppers who regularly buy cleaning products and shampoo at a grocery store are more likely to reach for vitamins, seasonal items or cosmetics while they are there. The basket builds from a foundation of routine. 

Retailers who under-invest in gateway category pricing, shelf presence and in-stock performance are not just losing those items.  

Merchandising is a competitive weapon, not a nice-to-have 

Several findings in the FMI report point directly to merchandising opportunities. Cosmetics with 13% and seasonal items at 17% both show higher impulse purchase rates than most other nonfood categories. Presentation matters in these categories in ways that are difficult for ecommerce to replicate. End caps, cross-merchandising and event-driven displays can convert browsers into buyers. 

Party essentials also deserve a closer look. Penetration is low, with only 27% of shoppers buying in the past 12 months, but among buyers, the channel is genuinely competitive. Mass, online, dollar and grocery all claim a share. Grocery can differentiate here through curation, local relevance and seasonal timing rather than trying to match the assortment breadth of a pure-play online retailer. 

The bottom line for grocery operators 

Three things can move the needle in nonfoods without requiring a complete reinvention: 

• Address the value perception directly through pricing architecture, private brand investment and promotional strategy in the categories where the gap is widest.
  
• Protect and grow the gateway categories that build shopper habits and anchor the broader nonfood basket.
  
• Use the physical store's natural advantage in impulse and discovery to compete against channels that can only sell on assortment and price. 
  

The shoppers are already coming through the door. Now focus on your customer by offering exactly what they want and knowing why they leave without buying it.  

The Power of Nonfoods at Retail 2026 is available for download at no cost, with the complete data, category breakdowns and detailed charts. 

Download The Power of Nonfoods at Retail 2026