For decades, stores have been designed to display products, process transactions and replenish shelves. Now, however, that role is being fundamentally redefined as grocery retail’s next evolution takes shape with the emergence of the sentient store.
These are intelligent retail environments that can understand what is happening in-store, learn from experience, predict what is likely to happen next and optimise decisions in real time.
The shift is as significant as it is deceptively simple. Historically, stores generated transactions; tomorrow’s stores will generate intelligence.
Learning speed as competitive advantage
Rather than relying on delayed reporting and retrospective analysis, retailers are moving towards a future where every shelf, customer interaction, colleague task and operational process becomes a source of live insight.
Retailers’ future competitive advantage will depend not simply on access to data, but on how quickly businesses can learn, adapt and respond. In the age of AI, learning speed becomes the differentiator.
That means anticipating demand, preventing out-of-stocks, reducing waste, optimising labour, improving execution and delivering more personalised shopping experiences.
Crucially, this future is already taking shape.
Industry leaders are building the future
Retail leaders including Tesco, Walmart, Carrefour and Albert Heijn are accelerating investment in AI, computer vision, digital shelf technology, connected infrastructure and automation.
While often viewed as standalone technology projects, we argue these initiatives are collectively laying the foundations for a fundamentally new retail operating model.
Walmart provides one of the clearest examples. The retail giant has deployed digital shelf labels across approximately 2,300 US stores and expects the technology to become chain-wide within the next year.
It has also rolled out AI-powered tools to its 1.5 million associates, including task-management capabilities that claim to reduce shift-planning time from 90 minutes to 30 minutes, while developing purpose-built agentic AI tools using proprietary retail data to improve both operations and customer experience.
Creating a unified ecosystem
Tesco is pursuing a similarly ambitious strategy. The retailer is deploying electronic shelf-edge labels across approximately 3,000 stores, introducing autonomous cleaning robots, trialling AI-powered assistants and testing autonomous inventory-monitoring robots.
It is also investing in AI and agentic capabilities to better interpret customer needs, enhance personalisation and deliver more relevant shopping experiences.
Viewed together, these initiatives suggest Tesco is laying the foundations for a hyper-connected store, where AI, robotics, digital shelf infrastructure, computer vision and connected operations work as a unified ecosystem.
Elsewhere, Carrefour is digitising shelves across France through electronic shelf labels, smart rails and AI-powered cameras, with ambitions to reduce out-of-stocks by 20%. Albert Heijn in the Netherlands is applying AI to forecasting and markdown optimisation, helping reduce bread waste by 815,000kg in the second half of 2025 alone.
From hindsight to foresight
What makes these developments particularly significant is that they represent a shift from hindsight to foresight. Rather than relying on historical reports and periodic reviews, retailers can increasingly anticipate demand, identify risks and optimise decisions in real time.
The progression from connected store to hyper-connected store and, ultimately, to a sentient store represents a fundamental change in how retailers operate. Intelligence that was once fragmented, delayed and retrospective becomes continuous, connected and actionable, enabling retailers to make faster and better decisions across the business.
However, the implications extend beyond operational efficiency.
For shoppers, sentient stores promise more relevant promotions, better availability, faster service and a more seamless experience across physical and digital channels. As consumers increasingly expect a joined-up retail journey across channels, store intelligence could make true omnichannel retail a reality.
Determining tomorrow’s winners
For suppliers, the impact could be transformative. Connected stores will provide near real-time visibility into pricing, availability, compliance, promotions and shopper engagement.
Instead of relying on historical reports and periodic store audits, suppliers will increasingly be expected to act on live intelligence alongside retailers, creating a new model of continuous optimisation and collaboration.
This could enable suppliers to improve everything from forecasting and category management to promotional execution, waste reduction and supply chain planning.
Most importantly, these shifts will transform the physical store from the endpoint of the value chain into one of the industry’s most valuable sources of intelligence.
And in that future, the winners may not be the retailers with the biggest stores or the largest ecommerce operations, but those that learn fastest and collaborate best with suppliers to turn that intelligence into action.
The Institute of Grocery Distribution (IGD) is a charity that offers insights and consulting services to the food sector with the aim of uniting the industry to address critical challenges across the agrifood supply chain. For more insights into sentient stores, you can download a free sample of the IGD report ‘The hyper-connected store: from vision to reality’ on the IGD website.
Toby Pickard is a retail futures senior partner at IGD specialising in store of the future concepts, technology and innovation.
