The National Restaurant Association (NRA) expects foodservice sales to hit a record high in 2015, up 3.8% to $709 billion across the segments. That’s great news, yet hurdles such as food and labor costs have kept the industry from performing as well as it could in a post-recessionary economy. It’s been a take-share environment for operators trying to grow their sales, but the opportunity to grow the total pie exists: Thirty-eight percent of consumers say they are not eating at restaurants as frequently as they would like, and 41% say they are not purchasing takeout or delivery as often as they’d like, according to the NRA.
And yet a seismic shift has occurred as brand-new players have entered the battle for market share. Consumers can now find unique, freshly prepared meal options not only at restaurants but also convenience stores, grocers, hospital cafeterias, drug stores and beyond. Every retail segment is now part of the foodservice industry, and as years go on, consumers will become increasingly accustomed to including all of these segments in their decision-making process.
At the same time, consumer expectations are higher than ever, and savvy operators across all segments are finding ways to deliver. Local ingredients, scratch cooking and vegetarian and gluten-free options are in demand across a growing range of foodservice operations. Consumers don’t care about segments; they care about who can promise and deliver on their desires. Just ask the mom of two who lives in Wawa country, the urban dweller stopping at Walgreen’s for lunch, the hospital guest looking forward to dinner at the cafeteria, or the college kid unenticed by the restaurants sitting just outside the dining hall.
Take a look at the two segments that have received the most buzz in recent years: fast casual and c-stores. For c-stores, foodservice has become a bright spot for many operators as fuel and tobacco sales have declined and consumers’ desire for quick, convenient and customizable foods and beverages has grown. Foodservice already is the No. 1 category for in-store gross margin dollars and No. 2 for in-store sales, according to NACS. On the restaurant side, the overwhelming success of fast-casual restaurants makes it clear that consumers are demanding high-quality foods at low prices delivered in a way that’s still quick and convenient. It’s part of why the 12.8% growth of fast casuals blew away all other segments last year, according to Technomic.
So how can you grow your traffic and sales and also lure in those roughly four in 10 consumers who wish they were spending more money on foodservice? Whether via a model for delivering faster service or exceeding customers’ expectations of quality, hospitality or value, operators can and should reach across the aisle—and across segments—for inspiration and ideas. We aim to facilitate that discussion, because ultimately, the goals are the same: pleasing the consumer, driving traffic and growing sales.
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