Here's a useful exercise: Once a week stop thinking about restaurants as competitors that take customers from supermarkets and have little else in common with their grocer cousins. Instead, consider that the two types of businesses face strikingly similar challenges, but often deal with them differently.
chief operating officer of venerable restaurant chain Ruth's Chris Steakhouse, which operates more than 80 units in the U.S. and other countries. Miller is also the current chairman of the board of the National Restaurant Association. The venue was the Grocery Manufacturers Association Conference on the Future of Food, held recently in Washington.
Miller raised the topic of service and convenience. Both supermarkets and restaurants strive to deliver on those attributes. "But restaurants can't separate the service component from food," he said. "Service is one of the biggest drivers of our success. And we see the continued trend of more people dining out because of the time component."
Supermarkets may think they can provide food without service or convenience, but they would be wrong. "Restaurants are making their products more convenient and accessible," he said. "That's what the grocery industry has to do."
A story on Page 38 of this issue gives supermarkets some pointers about making the shopping experience speedier.
Both restaurants and supermarkets are looking to technology to help them connect with customers. Supermarkets have long been challenged, however, to successfully make use of shopper loyalty data. Restaurants are making new strides in these efforts.
"Technology is very adaptable for our business," Miller said. A year ago Ruth's Chris launched online reservations. Customers get instant e-mail confirmation. They are asked to create or update profiles online. By using technology, "We want to capture that special information," he said. "So when they make online reservations, we'll know they like merlot or Dewars and water."
Another common challenge for restaurants and supermarkets is the need to build clearer market niches. Supermarkets need to better define their positioning to avoid being caught in the middle as a generalist type of retailer.
Ruth's Chris is growing partly because it holds a clear niche with an upscale clientele that is more protected than most from economic swings. "We see increasing affluency at the upper end," Miller said, "and we're even taking our concept to more median markets than before."
Ruth's Chris is selling the same product it was 40 years ago: U.S. Prime Beef. But it's more successful than ever thanks to strategies around service, convenience, technology and market positioning. The company is executing on a full plate of challenges. Supermarkets should take note because they share that same plate.
