Omni Talk’s Anne Mezzenga and Chris Walton sat down with Neil Stern, CEO of Good Food Holdings, at Groceryshop 2025 in the VusionGroup booth for his second consecutive year on the show. Neil shared candid insights on smart store implementation realities, why changing consumer behavior is harder than technology deployment, and how premium grocers must win through differentiation when agentic AI finds the cheapest snack crackers online.
Five Years In: Operating Premium Grocery Across the West Coast
Neil marks exactly five years as CEO of Good Food Holdings, a multi-banner operator running premium grocery stores from San Diego to Seattle. The company operates five distinct banners: Metropolitan Markets (Seattle), New Seasons Market (Portland), New Leaf Community Markets (Santa Cruz—including a brand new store that opened Saturday), Bristol Farms, and Lazy Acres (both Southern California).
The mission: operate the best stores in their local markets by sourcing, producing, and selling great food. While the company name is Good Food Holdings, Neil emphasizes they’re really about great food—that ethos permeates the organization.
🔑 Centralized Tools, Local Execution
The Inverse of Lidl’s Strategy
Neil referenced Lidl CEO Joel Rampoldt’s statement from earlier in Groceryshop: “We are as global as possible and local when necessary.” Good Food Holdings operates the complete opposite philosophy: “We are as local as possible and global when necessary.”
This approach drives where the company finds efficiencies. Where centralization has zero impact on customer experience, Good Food Holdings consolidates aggressively. They’ve centralized IT, finance and accounting, legal, store development, and are in process with risk management. These back-office functions create efficiency without touching customer-facing operations.
However, merchandising, marketing, and operations remain local. Each banner maintains autonomy in these customer-critical areas.
Innovation Through Distributed Testing
Innovation sits between centralized and local. Neil comes to conferences like Groceryshop to evaluate solutions, but the company places bets across different markets. They might test camera technology one way in Seattle, try something different in Southern California, see what works, and then roll out aligned solutions. This approach encourages local innovation while maintaining central guardrails around pilots and proof-of-concept processes.
Smart Store: Solving the Right Problems
Elevating the Question
Neil believes the smart store conversation needs elevation—starting with what problems need solving rather than what technologies to deploy. The fundamental retail challenges haven’t changed: right product, right time, right place, right price. Historically, Good Food Holdings’ wonderful local chains solved these through experience, intuition, and great people. But that approach doesn’t scale.
To achieve the efficiencies needed for desired results, the company must get smarter through tools that enable better decision-making. That’s what smart store technology delivers.
The On-Shelf Availability Problem
Neil admits a basic retail problem: “I do not have a great idea today of what’s on my shelf.” Multiple solutions exist—cameras, robots, drones, individuals walking stores taking photos. But these tools only provide symptoms, like identifying which snack crackers are out of stock.
The critical question: Why are we out? In large-format stores, the answer might be simple—product sits in the back room. But Good Food Holdings operates small stores without giant back rooms. Usually, the issue is ordering problems or supplier delivery failures.
Smart store tools must connect upward into supply chain systems and sideways into merchant and category management processes. Maybe Nabisco isn’t distributing, rendering Wheat Thins out-of-stocks meaningless. Maybe the planogram allocates only two facings when four are needed, creating false out-of-stocks. Without integrated data flowing between systems, these category management and space planning decisions remain invisible.
The Customer Side: Harder Than It Looks
While the operations and back-end smart store applications show clear early ROI, the customer-facing elements prove more challenging. Neil believes both sides matter, but early use cases and returns come from internal operations improvements—making stores run better and more efficiently.
Smart Carts: Changing 50 Years of Habits
Good Food Holdings believes firmly in smart carts, but faces the fundamental challenge of changing consumer behavior. When customers use the carts, they love them—basket sizes increase, customer satisfaction rises. The problem: getting customers to adopt them and build new habits.
Neil compared it to reusable bags, which required changing 50 years of shopping habits. Some markets use carrots (New Leaf and Lazy Acres offer 10-cent environmental tokens for charities when customers bring bags), others use sticks (New Jersey outlawed single-use bags, penalizing customers who don’t bring their own).
Smart carts may eventually require similar incentives—like self-service gasoline becoming cheaper than full service, creating economic motivation for behavior change. Currently, if the value proposition is merely “avoid checkout,” that’s not compelling enough.
The Real Smart Cart Value: Personalized Interaction
Neil sees carts as the pathway to truly personalized one-on-one customer interaction. The technology knows exactly where customers are in-store, who they are, and what they buy. At the meat department, the system could suggest recipes, identify other needed items, offer 50 cents off ground beef, and provide complementary product recommendations.
This has genuine customer value—but only if it goes beyond checkout avoidance. The goal is bringing online shopping tools (filters for vegan, recipe development, dietary preferences) into physical retail where 35,000 products create overwhelming choice without navigation aids.
The Integration Problem: Nine Months and Counting
Neil’s panel with Weedle and Schnucks emphasized the need for connected stores where technologies work together seamlessly. He shared frustration about trying to integrate two great partner suppliers—nine months into the process without resolution. This should be a simple switch.
The challenge intensifies for stores with high operational complexity. The new Santa Cruz New Leaf features a coffee and juice bar, sushi poke bar, service bakery, barbecue station, sandwich station, service meat and seafood departments—it’s like gymnastics with a 10 difficulty rating. In an ideal world, they’d execute at 10 on both difficulty and execution, creating competitive moats.
But every new technology adds to associate checklists. Smart carts need plugging in and management. Robots require process oversight. Associates see new technology not as excitement but as additional work. Unlike Schnucks’ reportedly enthusiastic teams, Good Food Holdings associates ask what Neil is adding to their already-demanding responsibilities.
The Consolidation Imperative
Neil welcomes technology industry consolidation—there are simply too many disparate solutions. While he won’t weigh in on who should consolidate, he believes it’s critical for the next wave of smart store success.
Macro Headwinds and Agentic AI Threats
The Cautious Consumer
Good Food Holdings serves a more premium, less price-sensitive consumer base—an advantage in difficult times. But they’ve seen sales slow in the second half after a gangbuster first half. The consumer is definitely more cautious amid tariff uncertainty, MAHA initiatives, and general economic concern.
Neil watches two daily metrics: units and inflation. They’re running around 3% internal inflation, meaning without 3% comps, they’re going backwards. The macro grocery environment shows declining units—the industry is selling fewer units overall, creating pressure.
Neil doesn’t think the sky is falling, but expects a tougher environment ahead.
Differentiation vs. Agentic AI
Interestingly, AI received less conference attention this year than last—perhaps because it’s now embedded everywhere rather than requiring explicit callouts. But agentic AI presents both threats and opportunities.
Neil’s response: lean on technology partners for solutions while becoming increasingly differentiated. If agentic AI runs the show searching for cheapest Wheat Thins, Bristol Farms and Metropolitan Market lose that game. They’re not winning on commodity pricing.
The strategy: sell proprietary food service products and items they do uniquely well. Win the agentic game by offering products agents can’t find elsewhere. If the world is about who sells wheat thins cheapest, premium grocers fail. But if it’s about charcuterie plates with unique cheeses and artisanal crackers for wine night, differentiation wins.
The answer to agentic AI isn’t fighting it—it’s becoming so differentiated that customers seek out Good Food Holdings banners for products and experiences unavailable elsewhere.
The Bottom Line
Good Food Holdings demonstrates that premium grocery success requires balancing centralized back-office efficiency with local merchandising autonomy, solving operational problems before chasing customer-facing technology bells and whistles, and understanding that changing consumer behavior is harder than deploying new tools. Smart stores deliver clearest ROI on operations side first, while customer-facing benefits require overcoming adoption hurdles through compelling value beyond convenience. As agentic AI threatens commodity product sales, Neil’s strategy is clear: differentiate through proprietary products, food service excellence, and experiences that can’t be replicated online or found through price-searching agents. Sometimes the answer to technological disruption isn’t matching it—it’s being so uniquely valuable that technology drives customers your direction instead.
🎧 Want to hear the full conversation? Watch above or listen via your favorite podcasting platform:
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Be careful out there,
– Chris, Anne, and the Omni Talk team
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Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton and Anne Mezzenga founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.