When adopting artificial intelligence (AI), small and medium-sized enterprises (SMEs) in the grocery retail sector face numerous tensions, including balancing cost efficiency with innovation requirements. These tensions are paradoxical, requiring continuous management instead of definitive resolution. This study investigates those paradoxical tensions among grocery retail SMEs through a qualitative study based on 18 semi-structured interviews with grocery retail SME managers and employees. Drawing on the double loop model of organizational tensions, we distinguish between latent tensions (e.g., cost-innovation trade-offs) and salient paradoxes (e.g., escalating workforce resistance-assistance trade-offs). Our findings show that many grocery retail SMEs rely on single loop strategies for short-term stability, which fail to navigate contradictions, while double loop dynamics foster systemic transformation. By illustrating how grocery retail SMEs encounter recurring AI barriers and showing how double loop dynamics integrate AI sustainably, this research spotlights organizational tensions in SME AI adoption and how they can be addressed.