Are Grocers Stealing Your Foodservice Mojo? You Bet
By Abbie Westra on May 19, 2016OAKBROOK TERRACE, Ill. -- Grocery foodservice sales are expected to see a solid 9.3% nominal growth, or 6.8% real growth, this year, according to Technomic. Compare that to convenience stores at 3.3% nominal growth, or just 1.0% in real growth, and you have yourself a formidable opponent in the share for prepared-food dollars.
So who’s winning, and what are they doing right?
Mariano's
Now 37 stores strong, Mariano’s has turned the Chicagoland area from specialty-grocer desert to prepared-foods paradise. Shoppers peruse the aisles with adult beverage in hand, a grand piano twinkling in the background and fresh-food options far and wide.
Sales-growth drivers for supermarket foodservice, according to Technomic, include strong consumer acceptance, a focus on the guest experience, a true commitment to resources and innovation in proteins, sandwiches and prepared meals.
H-E-B
San Antonio-based H-E-B has a number of dine-in and quick-serve concepts across its 370 stores. At Table 57, a 183-seat dine-in restaurant with a bar and patio, guests order at a counter from a broad menu of fresh-cooked burgers, sandwiches, soups, salads and barbecue smoked on site. The company has even branded a supermarket staple—rotisserie chicken—with its Flaming Bird concept.
Despite its strength, supermarket foodservice faces its own set of challenges, according to Technomic. These retailers must master how to transition foodservice from just a traffic driver to a true profit center. They are overcoming speed-of-service hurdles, and while dinner and even lunch are strong day-parts, the channel has a ways to go to capture breakfast and snacking occasions.
Lunds & Byerlys
Long before it was known for its prepared foods, Lunds & Byerlys had built a reputation for ambiance, with sit-down restaurants, carpeted aisles and a frozen-foods section decked out with glittering chandeliers. The Edina, Minn.-based retailer has evolved with the times, devising unique grab-and-go food concepts and robust hot and cold food bars. Its dine-in location, Lunds & Byerlys Kitchen, offers tablet ordering, a bloody mary bar and weekly trivia nights.
Over a three-month span earlier this year, 57% of surveyed consumers reported eating prepared foods at home from a grocery store, and 25% ate prepared foods in a grocery store's dining area, according to the second annual "The Why? Behind the Dine" report from Acosta and Technomic. Compare that to convenience stores: Over the same time period, 22% of consumers ate prepared foods purchased at a c-store at home, and 14% ate prepared foods in the dining area of a convenience store.
Giant Eagle
Pittsburgh-based Giant Eagle's various banners help it fit into any market. Its Market District brand features all the usual grocery foodservice fare, as well as large café areas with free Wi-Fi, draft beer and wine by the glass.
The younger the consumer, the more willing they are to purchase food from a grocer, according to the Acosta/Technomic study. Over a three-month time span, 64% of millennial diners (18-34) ate grocery prepared food; 60% of Gen X diners (35-50) ate grocery prepared food; and 51% of baby-boomer diners ate grocery prepared food.
Wegmans
The granddaddy of supermarket prepared foods, Wegmans has been in the foodservice game for years with its robust prepared foods and restaurant concepts that include The Burger Bar, Amore and The Pub. Its latest store in Midlothian, Va., clocks in at 115,000 square feet, features a full-service family restaurant and a café with seating for a whopping 250 people.