Winning at grocery retail means thinking beyond the center store and every other traditional department. Shoppers today want it all, and that includes options for grab and go, mix and match and sit-and-serve meals. Grocery stores across the country are dishing out lattes, lunches and lots more as competition for dollars comes from the retailer down the block, and the restaurant down the block, too.
The prospect of entering the restaurant market and succeeding there can be daunting. But there’s good news said Howland Blackiston, a principal at King-Casey, a restaurant and retail consultancy.
“QSRs have been perfecting this for over half a century,” he said. “They've done the trials and tribulations, have learned what works and doesn't work, they're leveraging the tricks of the trade in their industry to get superior sales results and to delight the customer.”
Now all retailers have to do is look at how these quick-service restaurants have thrived. Blackiston admitted that it is not the easiest venture, but it’s well worth it.
“The profits that are to be had with foodservice just about outperform everything else,” he said. “It's a very attractive business to be in if you get it right. So it's worth considering and fine-tuning because it's a great source of revenue and profitability.”
Points of difference
As Carrie Walters, the culinary director of Dorothy Lane Market, a gourmet chain based out of Dayton, Ohio, sees it, “everybody can carry Tide soap.” And over the past few decades, she has seen that the center of the store isn’t unique anymore. But no one else can “quite make our delicious chicken salad.”
At her three stores, we “sell the solution of what’s for dinner.” This includes grab and go, salads, heat and eat and meal kits. Dorothy Lane stores also have a cafe and a wine bar, in addition to a culinary center. Walters focuses on on-trend flavors and global influences.
Walters finds inspiration in fast-casual spots like “Sweetgreen and Lemonade in California, and all those fun places that just get on trend right away,” she said. Recipes at these spots “are things that at a food production level we can totally do. We have all that stuff; we just need to package it up in a way that's fresh and unique, [so customers will think] ‘why not pick it up while you're shopping?’ versus having a separate stop for a cool grain bowl or a yogurt parfait.
Dorothy Lane Market is wise to focus on fresh, said Blackiston, as supermarkets already have the perception of freshness.
“Just look around you, there's the meat department, the fish department, the produce department, everything is fresh,” he said. “They've got a huge advantage in terms of consumer perception of freshness and that's really important to consumers.”
Meeting customer needs
At Whole Foods Markets, the prepared food venues are an extension of the brand, with a focus on quality, local ingredients and an understanding of what the customers at a specific location are looking for, said Julia Obici, the retailer’s global executive coordinator of culinary & hospitality.
“The key is always finding the right menu concept for that community of shoppers. We work to understand whether the neighborhood is looking for fast family meals, vegan options, sit-down dining or perhaps a bar venue,” Obici said.
“Overall the mix of venues and prepared food options we offer varies from store to store but is always curated with the local shoppers in mind,” she said. “Options at all of our stores include salad bar and hot bar, chef’s case, sushi venue, pizza venue and a sandwich venue.”
Various options like the ones found at Whole Foods suit the youngest shoppers, said Blackiston.
“The expectations of Millennials these days is they expect fast, convenient, easy, tasty, healthy, entertaining, fun, exciting,” he said.
Another advantage that groceries have over other restaurants is their convenience for shoppers.
“You've got the audience already,” said Blackiston. “Everybody goes to the supermarket once a week. I don't know that everybody goes to their QSR every week or more than once a week. There's the convenience of being there. But you've got to go beyond that.”
Blackiston suggests starting in the most obvious place — the menu. First, pick a strategy and make sure it matches up with your business model.
There’s a science behind a menu. Focus on profitable items, combo meals and unique offerings. Then make it easy for customers to order those items. “The No. 1 communication device is the menu board,” said Blackiston.
And don’t get too caught up in the latest trends.
“I've been doing this a long time, and one thing I've learned is that when people look sideways at other industries, other competitors, to see what they're doing they tend to notice what's new,” he said. “If you go around to these [QSR] stores and see the digital kiosk, you may just jump right to that and say, ‘well we need a kiosk,’ without realizing that they've been doing other stuff for 50.”
His advice is to get the menu right first.
Contact Gloria Dawson at [email protected]
Follow her on Twitter: @gloriadawson
Learn more about online grocery shopping/delivery and meal solutions at the inaugural SN Summit, held Oct. 1-3 in Dallas, the only conference where food retailers and restaurateurs learn from each other.