The rapid adoption of GLP-1 weight-control drugs such as Ozempic, Wegovy, and Mounjaro, is reshaping the retail landscape.
Initially developed for type 2 diabetes management, these medications have become widely popular for their appetite-suppressing and weight-loss effects.
As a result, significant shifts are occurring in consumer spending patterns, profoundly affecting various retail categories, including snacks, supplements, beverages, apparel, and even fitness products.
The impacts are being felt differently by big-box retailers and smaller specialty shops, highlighting the importance of strategic adaptation across the industry.
Shifting Consumer Behaviors
Consumers on GLP-1 medications report decreased appetite and altered taste preferences, leading to a decline in purchases of high-calorie, processed foods and sugary snacks. Research suggests that individuals using these drugs spend approximately 11% less on groceries, with notable reductions in categories such as sweet snacks, frozen pizzas, and sugary beverages.
Walmart, for instance, has observed a "slight pullback" in spending among GLP-1 users, particularly in snack and confectionery categories. These findings are consistent across other major retailers, underscoring a broader trend toward healthier, nutrient-dense food choices.
Snacks and Supplements
The snacks and supplements industries are at the forefront of this transformation. Food manufacturers are reformulating products to align with the preferences of GLP-1 users.
Conagra Brands, for example, plans to label certain Healthy Choice frozen meals as “GLP-1 friendly,” emphasizing low-calorie and high-protein content. Similarly, Nestlé has launched product lines focusing on high-protein and fiber-rich options to cater to this emerging market segment.
The supplement industry is experiencing parallel shifts. Companies are developing products aimed at mitigating side effects of GLP-1 medications, such as digestive issues, and addressing potential nutrient deficiencies. Products marketed as enhancing natural GLP-1 levels or supporting gut health have proliferated, though their efficacy remains subject to scrutiny.
Alcohol and Beverages
GLP-1 users often report a diminished desire for alcohol, leading to decreased sales in this category.
Liquor retailers and bars are feeling the pinch, while manufacturers of non-alcoholic beverages are witnessing a surge in demand. According to NielsenIQ, sales of non-alcoholic spirits and beer have grown by 30% over the past year, reflecting this shift.
Fast Food and Confectioneries
Fast food chains and confectionery brands face challenges as GLP-1 users shy away from high-calorie, indulgent options.
McDonald’s has noted a slight decrease in average order sizes in regions with high GLP-1 usage. Candy manufacturers like Hershey’s are exploring reduced-sugar and higher-protein formulations to stay relevant.
Apparel and Fashion
The apparel sector has seen increased demand for smaller clothing sizes and wardrobe refreshes.
Specialty retailers like Lululemon report growth in activewear sales as GLP-1 users embrace new fitness goals. Conversely, fast-fashion retailers with broader size ranges, such as Old Navy, have experienced more uneven results.
Big-Box Retailers vs. Specialty Shops
Big-box retailers like Walmart and Target are better equipped to adapt to these shifts due to their diverse product offerings and economies of scale.
Walmart has introduced more "GLP-1 friendly" products, including high-protein snacks and low-calorie frozen meals. Target’s curated, health-forward brands, such as Good & Gather, align well with the preferences of GLP-1 users.
Big-box retailers’ advanced data analytics capabilities allow them to track purchasing trends and adjust inventories in real-time. This agility positions them to refine their assortments and maintain relevance in a rapidly evolving market.
Smaller specialty retailers face distinct challenges and opportunities. Health food stores like Whole Foods are capitalizing on the trend by promoting nutrient-dense products tailored to GLP-1 users.
Supplement retailers, such as GNC and Vitamin Shoppe, are leaning into the demand for companion products, including probiotics and high-fiber supplements. Boutique apparel stores have seen increased sales from GLP-1 users undergoing body transformations, although managing inventory for fluctuating demand remains a challenge.
Adapting to Emerging Trends
Retailers across the spectrum are innovating to meet changing consumer needs. Smoothie King, for instance, has introduced a menu specifically designed for GLP-1 users, featuring high-protein, no-added-sugar smoothies. Food manufacturers are leveraging the “GLP-1 friendly” label to market products, though the term remains unregulated and should be approached cautiously by consumers.
Private-label offerings present a significant opportunity for retailers. Walmart’s Great Value brand and Sprouts Farmers Market’s store-brand lines are expanding to include products specifically designed for health-conscious consumers.
Retailers are using digital platforms to showcase products tailored to GLP-1 users, while in-store signage highlights health-focused options. Specialty retailers are emphasizing personalized service, offering consultations and tailored product recommendations to build loyalty.
Long-Term Implications
The widespread adoption of GLP-1 medications could lead to sustained changes in consumer spending, with some categories, such as sugary snacks and alcohol, experiencing prolonged declines.
Conversely, health-focused foods, supplements, and fitness products are poised for growth. KPMG projects a potential $48 billion annual decrease in food and beverage spending over the next decade due to these medications, emphasizing the need for industry adaptation.
Big-box retailers are likely to maintain an advantage due to their scale and data-driven agility, but specialty retailers can thrive by carving out niches and emphasizing unique, high-quality offerings. The retail sector’s ability to innovate and respond to evolving consumer preferences will determine its success in navigating the era of GLP-1 medications.
