Restaurants are the enemy of retail.
That’s been the understanding ever since I began covering the food retail space a long time ago.
The discussion was always about how food retailers need to steal share from foodservice and how supermarkets can beat restaurants in a zero-sum game.
This rivalry ebbed and flowed along with economic cycles and generational changes.
Yet the two R’s — retail and restaurant — can be allies as well as enemies.
Today there’s more talk about how new consumer preferences are blurring the lines between retail and restaurant. In some cases it’s even hard to tell these businesses apart.
I recently had the opportunity to attend the restaurant conference called MUFSO, produced by my sister foodservice brands, which include Nation’s Restaurant News, at parent company Penton. MUFSO stands for Multi-Unit Foodservice Operators Conference. It was an impressive gathering of industry leaders and speakers.
What really struck me at MUFSO’s educational sessions and during hallway conversations was how much the two R’s have in common, even excluding the obvious fact that both sell food. You could easily substitute the word supermarket for restaurant, and the rest of the MUFSO dialogue would make complete sense. Here are some of the points made about the restaurant business that are completely relevant for food retail.
• Operators need to do a better job of attracting and retaining workforces. Whether that means filling specialized roles in a high-demand market or setting up education and training to advance skills and motivate workers, the employment challenge is only going to get more difficult.
• If you don’t make a big effort to understand Millennial guests and customers, you’ll be out of business soon. Among other things, Millennials want a closer relationship to their chosen brands than do earlier generations.
• Companies need to step up their games with the latest marketing tools, and social media tops the list. One restaurant chain is aiming for a seamless way to attract users via social media and then immediately inform the local manager to give those users VIP experiences.
• There’s no substitute for connecting to communities. This involves local and hyper-local foods, involvement in area activities, and catering to underserved neighborhoods.
• Keeping alive the entrepreneurial spirit is essential for industry growth. One top restaurant executive said the most important trait for entrepreneurs is “having the confidence to change things” and “not being devastated by failures.”
Does much of this sound familiar to the retail side? Whether it’s Kroger or Applebee’s, Hy-Vee or In-N-Out Burger, the two R’s are dealing with many similar issues. There is already collaboration between retail and restaurant trade associations on noncompetitive issues such as reducing food waste. It would make sense for companies that don’t directly compete to step this up a notch by sharing business lessons with each other. Realistically, this opportunity is more likely for regional players that don’t overlap market areas. Learning from another industry is an out-of-the-box experience that can’t be replicated by studying only one’s own sector.
So are restaurants the enemy of retail? Sometimes yes, but not always. And even enemies can find mutually beneficial ways to work together.
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