After years of trial with food courts, the supermarket industry is still deliberating.
Many operators, both large and small, have launched some form of in-store food-service program, and many also continue to struggle, looking for the right strategy to make those programs work. (For a closer look at what four operators have been doing, see the accompanying stories about Wegmans, Harris Teeter, Riser Foods and Nelson's Market.)
From supermarket giants such as Kroger Co. to fresh food specialists such as Wegmans Food Markets or Ukrop's Super Markets, the common trend is to keep changing. But that seems to be about the only thing many supermarket food court strategies have in common.
Retailers are trying such tactics as:
Tinkering with variety, whether that means beefing up menus or paring down programs.
Mulling, and mulling again, whether to brand or not to brand.
Seeking the right balance between takeout and eat-in options, which in turn leads to questions about seating and chilled vs. hot foods.
"The food court business is in a state of flux," said James Riesenburger, director of deli operations at Wegmans, Rochester, N.Y., an operator many look to as a trendsetter in fresh foods.
"We, as an industry, are just coming to the realization that food courts are a different business than the supermarket business. Supermarkets have been playing by rules that just aren't applicable to food service," Riesenburger said.
But the traditional rules of food service don't seem to apply either. A big part of the struggle is still simply to define what a food court is, or should be, when it comes to supermarkets.
"There won't be one direction consistent over the next few years. Everybody's scrambling to figure out how they can offer quality foods conveniently and make money doing it in their particular stores," said Neil Stern, a partner in McMillan/Doolittle, a Chicago-based retail consulting firm. "I think developing your own signature programs is the best way, but only a handful have the capability to do that."
Originally an offshoot of the huge fast-food business, the food court was born in shopping malls as a way to offer shoppers multiple food choices and a convenient place to sit, have a quick meal and a few minutes' rest before hitting the stores again.
But a lot has changed in the few years that grocers have been courting that kind of business. The broader issue of how to sell prepared foods has grown dramatically more important because more retailers are realizing that they are competing with food-service operators for the consumer's overall food dollar -- and they might be losing ground.
One of the biggest developments is a new concept being called "home meal replacement," which blurs the image of what a supermarket food court should be.
Broadly, home meal replacement means being there with a simple, wholesome answer when consumers ask, "What's for dinner?" -- a question they no longer have the time, desire or skill to answer on their own. It means offering more than fast food, but not in the venue of a sit-down restaurant.
Nearly all the industry sources who talked to SN about food courts pointed to Boston Market, the Golden, Colo.-based food-service operator formerly known as Boston Chicken, as a driving force in this new movement.
"We have realized that the home meal replacement places such as Boston Market are our present and future competition," said Gianfranco DiCarlo, director of deli, bakery and food service at 140-unit Harris Teeter, Charlotte, N.C.
Thus, an increasing number of retailers have begun merchandising meals instead of just components, and are taking shots at the evening meal opportunity in particular.
They are also rethinking their menus. In some cases they are more clearly segmenting the menus of their food court programs to differentiate between them and to streamline the process of buying from a food court.
A major goal in many menu overhauls is to help customers more easily decide what they want, and then have an easier time ordering it.
"Not only does posting a menu for each program make it simpler for the customer, but it actually gives the perception of even more variety," said Jack Allen, professor of food marketing at Michigan State University, East Lansing, who documents fresh food trends across the country.
"I think a clearly stated menu is so important that I believe some food courts have failed because of a gap between the menu and what was presented," said Howard Solganik, president of Solganik & Associates, a Dayton, Ohio, consulting firm that works with supermarkets.
Chains are also guarding against failure by seeking greater efficiency in operations and making better use of their food court resources.
"They're making food stations multifunctional so they'll not be so labor-intensive," said an industry source. "And I see supermarkets reorganizing seating so it's more of a snack place than a dining area. They're also pulling the more theatrical programs like cappuccino bars up front to attract attention."
Marcia Schurer, president of Culinary Connections, a Boulder, Colo., consulting firm, said retailers are looking at capturing more markets. "For example, they're covering more meal periods, such as breakfast. And I'm seeing more short-term seating, more stools and counters," she said.
Retailers are playing musical chairs, sometimes decreasing the amount of seating or eliminating it entirely; and, other times, offering seats for the first time or increasing space for seating.
"Deli directors who were saying two years ago they'd never be able to sell top management on seating are now adding it," said Tom Pierson, a professor of food marketing at Michigan State University and a colleague of Jack Allen.
"[Seating] is what our customers want," said John Peter, owner of Peter's Grocery Co.,
Syracuse, N.Y., a four-unit independent that added seating for 20 to 30 in its stores over the last two years.
A new store to be completed next year will have even more seating. "I'm being forced into the restaurant business, in order to get our share of volume. It's going to be the future in supermarkets," Peter explained.
Farm Fresh, Norfolk, Va., has also added seating at its newest store, opened this summer in Kiln Creek, Va. The chain substantially built upon its hot food line-up at that same location.
According to consultant Stern, hot food and seating need each other. "I see retailers making huge investments in hot food programs and then not giving customers a place to eat it," he said.
But others say that seating isn't necessary -- and by extension, that hot food is not the hottest trend in food courts. Those retailers are deciding that it's a better use of their resources to concentrate on merchandising food chilled for take-out.
"I don't think people want to come in and shop, and then sit down and eat dinner," said Fred DiQuattro, director of deli-bakery-seafood at Riser Foods, Bedford Heights, Ohio, which operates 38 supermarkets under Rini-Rego and Stop-N-Shop banners.
Riser will not put seating in new stores and remodels. Instead, the company is focusing on chilled, prepared entrees and side dishes to take home and heat.
Another ongoing argument about food courts is whether you should do the whole thing yourself or open the door for established branded food-service operators to do it for you.
Stern cited Wegmans as "best of class when it comes to doing it yourself." But, he added, "They've been doing it for 10 years and they've gotten better at it."
Not all retailers have the ingredients needed to go it alone. So they're contracting with food-service experts.
These days, retailers are choosing either those with brands that hold national or local clout, or those with prefabricated concepts such as Orion Foods, a Sioux Falls, S.D.-based provider that offers modular programs it can tailor specifically to retail stores.
In several of its divisions, Kroger Co., Cincinnati, is using national or regional brands to anchor its food courts, and then is complementing the mix with its own programs.
Stern said, "What Kroger is doing is significant. They're putting combinations of the PepsiCo brands like Taco Bell and some local brands in an increasing number of stores. They know giving the customer hot food variety is important, but they're turning it over to the people who have the expertise."Officials at Kroger Co.'s corporate offices could not be reached for comment.
Whatever the brands, multiple stations add variety, which is becoming more valuable to supermarkets. That's a major reason Randy Nelson, owner of Nelson's Market, North Branch, Minn., put in five of the food concepts offered by Orion Foods.
"We wanted a lot of variety right away, and it's been a success," Nelson said.
"Supermarket customers are used to huge varieties on the grocery shelves," said Tom Pierson at Michigan State. "You don't go into a Chinese restaurant and expect to find ravioli, but supermarkets are different. People do expect a large assortment."
Variety does not have to mean bringing in a brand that shouts fast food. Some supermarkets are linking up with grocery manufacturers to try a food station that has a familiar supermarket ring.
Sandwich stations set up by Sara Lee are an example. Kroger's Houston division has teamed Sara Lee stations alongside national brands and its own programs.
Celentano, a manufacturer of frozen Italian entrees based in Verona, N.J., is working on incorporating its own branded kiosk in the supermarket deli. The kiosk would serve fresh pasta and sauce hot, either to eat in or take out.
