Supermarkets have emerged to be the symbol of modern and increasingly complex food value chains globally. Beginning in the 1980s through the mid 2000s, Mexico experienced rapid growth in supermarkets. Concurrently, there began to be signs of worrisome dietary and health changes. Using detailed municipal-level supermarket entry data and a pseudo-panel built from repeated cross-sectional household income and expenditure survey data from Mexico between 1996-2006, I assess how the emergence of supermarkets in Mexico relates to the demand for food in five nutritional quality groups (healthy, unhealthy, contentious, food away from home (fafh), and other). I estimate a quadratic almost ideal demand system (QUAIDS) model. I find that the number of supermarkets, specifically the number of Walmart stores, in a municipality is associated with the average household shifting away from healthier foods. However, the number of supermarkets is not significantly linked to a household’s demand for unhealthy foods. Despite the convenience afforded by supermarkets to purchase ingredients to prepare foods at home, I find that with more supermarkets, there is a significant increase in the amount of food that is consumed away from home. I conduct robustness checks to rule out that supermarkets are inducing significant changes in key demand drivers: retail food prices and household income. Results indicate that the emergence of supermarkets, especially the entry of a global retail chain, is related to changes in consumer expenditure patterns across product categories with distinct health attributes and with potential public health implications.