The food expenditure share spent in modern retailers was found to be positively associated with overweight in adults, but not in children. For children, a positive association between expenditures in modern retailers and height was identified. Modern retailers contribute to higher consumption of ultra-processed foods and calories. But they also increase protein and micronutrient intakes among adults and children, mainly through higher consumption of meat and dairy. The findings underline that modern retailers can influence diets and nutrition in positive and negative ways. Differentiated regulatory policies are needed to shape food environments for healthy food choices and nutrition.