That said, Coster noted that much of the innovation in grocery technology is taking place in private companies, and larger companies not included in the report.
“We also expect much of the associated innovation to originate in other verticals, including financial services, software security, and consumer electronics,” Coster said.
The rise of e-commerce giant Amazon contributed to the struggles of the brick-and-mortar clothing retailers, and now looks to increase competition with an increasingly challenged grocery industry. Last week, Kroger cut its full-year earnings per share guidance by about 20 cents due partly to higher costs and reported a second-straight quarter of declining sales at established stores.
Goldman Sachs and Deutsche Bank also downgraded Costco after Amazon announced Friday a deal to acquire Whole Foods.
In March, Citi Research found that Wal-Mart appears “best positioned” among major food retailers to compete with Amazon in online grocery, while Kroger also scored high on the report. Whole Foods was at the bottom of Citi’s list.
— CNBC’s Jeff Daniels contributed to this report.