Wednesday, October 22, 2014

Want to know where McDonald's customer are Migrating?


McDonald’s doldrums are creating customer count declines directly correlated to the decline in the number of dollar menu offerings priced at $1.00 according to Foodservice Solutions® Grocerant Guru™ Steven Johnson.  Our field studies continually reveal that the undercurrents of QSR customer migration are grounded in competitive pricing and value offers from non-traditional fresh fast food outlets including C-stores.

The dollar menu and more positioning has proven to be a challenge for McDonalds.  While blaming speed of service, to many menu items offered, and complexity are all real issues.  The simple fact is the price, value, and service equilibrium is not in disarray rather it is under attack

The in fact Bloomberg reported that “McDonald’s famous Dollar Menu now includes items that cost more than $1, and other items are creeping above $5. At some McDonald’s locations in Chicago’s Loop, a Double Quarter Pounder with cheese, fries and a drink totals about $7.50. Chicken Club sandwiches are $4.45, $4.99 and $5.19 at different Chicago McDonald’s restaurants, without sides or a beverage.”

Still an Aspirational

With 49 Million Americans still receiving food assistance via the SNAP program Foodservice Solutions® filed research shows that McDonald’s is still the number one aspirational restaurant brand or consumers receiving SNAP benefits. Yes, McDonald’s is an aspirational brand. Do not doubt it. 

So, where are McDonald’s customers migrating too?  Papa Murphy’s where they can utilize SNAP benefits to buy fresh prepared Heat-N-Eat pizza for one.  Secondly to 7-Eleven where mix and match menu offers are sub one dollar on some items, creating a value position that is strong and driving top line growth, new store counts, and bottom line profits. 

Stuck in the Middle

McDonald’s high end customers those spending between $6.25 and $7.50 per order are migrating to Panera Bread, Chipotle Mexican Grill, and Chili’s enticed with competitively priced promotions. This customer count decline is more about price than speed of service.  It has become a example of a company stuck in the middle of the market getting attacked at both ends.

More and more grocery stores delis are offering a lunch and dinner specials that are priced below lunch or dinner specials offered my QSR’s and Fast Casual restaurants.  Even more important the grocery stores offerings empower consumer choice with interactive participatory touch points that drive engagement.

We all know what happens when a company gets stuck in the middle.  McDonald’s is not in the middle but is misplaced, mispositioned, mispriced.  Customer count growth will drive long term success for any food retailer that can garner customers today rather than capitulate them. .  Integrating Foodservice Solutions® 5 P’s of food marketing into long term strategy not just tactics will drive customer count growth.

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information



Tuesday, October 21, 2014

Are C-stores Winning the Battle for Share of Stomach?


In the United States Aldi and WinCo are the two fastest growing fresh food grocery retailers both offer low-cost high quality fresh food.  Dollar stores all the while continuing expanding food offerings including more and more fresh food and fresh prepared Ready-2-Eat and Heat-N-Eat food. Walgreens, Rite-Aid each continue expanding fresh prepared food offerings creating a platform for ‘ruthless’ competition for legacy grocery stores that focus more on slotting fees than the consumer. All this while the restaurant sector continues to capitulate customers.
Food Consumer Discontinuity
The Restaurant sector continues to suffer customer declines according to TDn2K’s latest Black Box Intelligence and People Report same-store traffic fell 0.2 percent during September. According to Foodservice Solutions® Grocerant Guru™ Steven Johnson “that makes 5 years of flat or declining customer counts the consumer is not eating less they are eating somewhere else.”
Five years is a long, time, long enough that consumer behavior is evolving faster than many legacy food retailers. Five years is a long enough time that ‘promiscuous’ shoppers, are fast becoming brand loyal customer at new and non-traditional fresh food outlets.  Once driven by competitive pricing today consumers are more and more driven by convenience. 
So, Where Are the Food Shopper’s Migrating
Steve Bishop of BricksMeetsClick.com outlined where the upscale food shopper is migrating. Bishop has forecast that “Online grocery spending in the US will reach between 11% and 17% in most markets by 2023.  Bishop thinks that the fastest growing markets will reach that range even faster.   If the high-end is migrating to Online, the low end to discounters Aldi, WinnCo, and Dollar Stores where are those in the middle migrating?
Foodservice Solutions® Grocerant Guru™ say’s look no further than the United Kingdom to find how and where the ‘middle’ consumers are going creating new winners  the retail food space. It also provides a view how restaurants customer count capitulation can be explained. 

In fact “1 in every 3 visits to a convenience store in London is to buy food-to-go, according UK according to Katie Littler, Insights Director at him! research & consulting. Littler continued; “Overall 24p in every £1 spent in convenience stores is now spent on meal occasions (food-to-go or meal for tonight) and this proportion continues to grow.” 

Price Value Service

The price, value, service equilibrium is resetting in the United Sates.  Driven by new non-traditional fresh food retailers and continued economic doldrums.  Success does however leave clues. Doing what you have always done, and doing it the same way will not work today.  Do you understand the new competitive food landscape? Wawa in the US says that it is a Fast Casual Restaurant To-Go. Where are your customers eating?  Do you know how to compete in an Omni-channel world?   If not, we do.


Invite Foodservice Solutions® to complete a grocerant program assessment, grocerant scorecard, brand, or product placement assistance.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869  Linkedin.com/in/grocerant or twitter.com/grocerant

Monday, October 20, 2014

Howard Schultz Is The Best Prepared Food Merchant


If success leaves clues and they do.  One clue is success is much easier when you are prepared.  That got our Grocerant Guru™ wondering, was Starbucks CEO Howard Schultz ever a Boy Scout? We all know the Boy Scout motto is ”Be Prepared”.  There is no other retail food merchant as prepared to win as Howard Schultz according to the consensus of Foodservice Solutions® analytic team.

Last week when Starbucks Coffee Company continued its educate and elevate initiatives sharing with over 2000 district managers what it learned over the past year and how they plan to edify the Starbucks brand to
further transform and elevate the Starbucks Experience in Holiday 2014 and beyond.
What Starbucks Learned
Schultz stated: “Holiday 2013 witnessed a seismic shift in consumer behavior in which many traditional brick-and-mortar retailers experienced a decline in foot traffic compared to significant growth in online shopping”
He continued: “Customers researched, compared prices, and then bought the brands and items they wanted online, frequently utilizing a mobile device to do so. Since that time, we have been focused on radically redefining the Starbucks retail experience for our partners, customers and stores. As a result of the work we’ve done, Starbucks is poised for a great holiday – our innovation pipeline is strong and we have a number of initiatives ready to launch during the holiday and into calendar 2015 and beyond,” Since last winter, the company has completely reimagined the holiday experience in stores for this shopping
What Starbucks Knew
Starbucks knew  that for  “U.S. consumers today, innovation means basically one thing: convenience.”
In a recent GfK Roper Reports study, almost eight in 10 people (78 percent) said innovation is about finding faster ways of doing things; slightly less felt it was about finding “easier” ways. All other possible answers scored at least 30 percentage points behind. U.S. consumers seem to have an insatiable desire for cutting corners and they expect the companies they do business with to rise to the occasion.”

In addition Starbucks new that a  U.S. Labor Department study found working parents with children have about an hour a day for meal preparation and consumption  and that includes breakfast and dinner.

 Starbucks in Action Integrating Knowledge & Learnings
  1. Starbucks Gift Card and Ecommerce Expansion Coming Holiday 2014
  2. First-Ever Starbucks for Life Contest Coming Holiday 2014
  3. Mobile Ordering is now being tested with 2015 roll out planned
  4. Starbucks edified its Rewards Program Design and Marketing
  5. In January all Starbucks baristas and shift supervisors will get a pay increase. Experienced Partners who are at or above their pay range and eligible will get a lump sum increase.

Success does leave clues and regular readers of this blog know our team often states “The customer is dynamic not static and your company must be as well.”  Clearly Starbucks is prepared, positioned, and planning for continued success.  What did you learn last year?  What did you do with that knowledge?
Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information

Sunday, October 19, 2014

Full Flavor Food Fuels Sales


Foodservice Solutions® Grocerant Guru™ stated “one of the hallmarks of the grocerant niche is consumers growing appetite for ‘better for you’ food and beverage options.”  Bundling ‘better for you’ Ready-2-Eat and Heat-N-Eat fresh prepared food with full flavored portable meals and meal components will drive sales.
Ed Ancewicz, chef for Eurest the contract foodservice company that serves business and industry clients, stated “People try to eat well, but wellness items do not always taste good,” he says. “But you can add spices to it. A little spicy sausage goes a long way in flavor without compromising the integrity of the food.”
The rapid growth of multigenerational households, multi-cultural households, and a growing Hispanic population combined has created a platform in which “spicy foods” full flavored food will continue expanding its reach.  Today’s as the demand for bolder, spicier and adventurous flavors continues to grow.  Fewer and fewer consumers have the skill-set, time or inclination to cook from scratch or clean-up the kitchen according to Foodservice Solutions® Grocerant Guru™.
Billie Jo Waara chief marketing officer at Taco John’s stated’ “There has been a lot of attention on breakfast in the last year in the industry.  In our consumer research, consumers want a breakfast that is tasty and flavorful and a break from the normal routine. Our goal was to innovate and give a kick to someone’s morning routine.”
One of the best-selling items at Taco John’s is a spicy breakfast burrito according to Waara. The Taco John’s breakfast burrito combines scrambled eggs with a savory chorizo sausage, jalapeƱos and spicy salsa. Breakfast now account for 7.5 percent to 8 percent of menu sales for the franchised restaurants.
Success does leave clues and Full Flavor Food does Fuel Sales is a clue for all fresh food retailers. Since 1991 retail food consultancy Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche for more on Foodservice Solutions® or for a Grocerant Scorecard visit http://www.linkedin.com/in/grocerant, www.FoodserviceSolutions.us  Email: Steve@FoodserviceSoltuions.us

Saturday, October 18, 2014

Healthy Food Finds a Home On the Road


While it may seem that day after day we read in the newspaper, hear or the radio or TV that there is another automotive recall from GM, Ford or Chrysler that fact is today cars are built better than ever before, lasting longer, and getting much better gas mileage. Maybe that’s all because they sit in the drive-thru of fast food restaurants so long.  But I doubt it.  The auto makers are doing a good job.
So good in fact that many retail gas stations sales of standard products specifically gasoline are faced with a decline in total volume sold. Creating fewer profits for the operator.  Mark Larson, executive director of the Colorado Wyoming Petroleum Marketers and Convenience Store Association stated "The independent guy really does have a tough nut to crack. It is tough." What are they too do? 
In an effort to maintain profitability many gas station operators are turning to Ready-2-Eat and Heat-N-Eat fresh prepared food to drive customer frequency, top line sales and bottom line profits.  Fresh prepared Ready-2-Eat and Heat-N-Eat food creates a platform to drive consumer loyality, differentiation, and additional day-part sales success according to Foodservice Solutions® Grocerant Scoreboard team leader.

Invite Foodservice Solutions® to complete a grocerant program assessment, grocerant scorecard, brand, or product placement assistance.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869  Linkedin.com/in/grocerant or twitter.com/grocerant

Friday, October 17, 2014

Time, Speed, and Food Where Is Intersection?


The retail food price, value, service equilibrium is dynamic not static.  To be successful within food retail today retailers need to be mindful of consumers evolving mindset. Today we find the consumer at the intersection of time starved, speed of service, and quality of food.

According to GfK Insights for “U.S. consumers today, innovation means basically one thing: convenience.  In a recent GfK Roper Reports study, almost eight in 10 people (78 percent) said innovation is about finding faster ways of doing things; slightly less felt it was about finding “easier” ways. All other possible answers scored at least 30 percentage points behind. U.S. consumers seem to have an insatiable desire for cutting corners and they expect the companies they do business with to rise to the occasion.”

Ready-2-Eat and Heat-N-Eat fresh prepared food saves consumer time.  In fact a U.S. Labor Department study found working parents with children have about an hour a day for meal preparation and consumption — and that includes breakfast and dinner. That’s not much time and one of the key drivers of  the rapid consumer adoption of Ready-2-Eat and Heat-N-Eat fresh prepared mix and match meal components.

The current evolution is being driven by hand held marketing (smart phones). Today we have “High-speed Internet connections both at home and on the road.  Smart phones have forever changed consumer expectations. Consumers “need for speed” has been transferred to the brick-and-mortar world, raising the bar for service and reducing the amount of time customers are willing to spend in a given store.

Today consumers are looking food, food solutions, in the palm of their hand.  This is creating a since of urgency to please and intense completion between retailers like never before.  GfK found they keys that consumer consider very important today they are:

1.        Know me: Remember not only what they purchase, but where, so you can guide them to the closest store and alert them to promotions only on products they buy. 
2.       Listen to me: Solicit and act upon their feedback. If you don’t give social media mavens an outlet for feedback, they will create one. It can be as simple as a “How did we do?” text after their purchase or an invitation to a quick mobile survey.

3.       Reward me: Shoppers’ expectations of loyalty programs continue to escalate beyond the manufacturer-funded promotions they get now. Cash discounts for frequent visits, checking in on social media, submitting a Yelp review or just trying a new product all can be managed to drive trips, share of wallet and unpaid media visibility.

Above all retailers must not forget that your food must taste good first. That said consumers will reward you if you remember that the retail food price, value, service equilibrium is dynamic not static and your company should be as well.

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

Thursday, October 16, 2014

Legacy Grocer Lowes Foods 100 Concepts but No Clue


When legacy grocery retailers have lost touch with the consumer you never know what they are going to do next.  The undercurrents of customer migration from legacy grocery store chains the ilk of Winn Dixie, Supervalu, Kroger, and Publix too Aldi, WinCo, Trader Joe’s, and Whole Foods has been well documented.  The value proposition consumers are attracted to more and more continue to be Ready-2-Eat and Heat-N-Eat fresh prepared food aka the Grocerant Niche.
So when Tim Lowe, president Lowes Foods a 100-store chain, stated that Lowes is “less interested in being an incrementally better grocery store and more interested in creating “something different and unique in the grocery experience overall,”.  We thought great Ready-2-Eat and Heat-N-Eat here they come.
We were wrong.  During an interview with a local TV reporter (video posted online), “Lowe said the company is striving for what he calls “retail-tainment,” which includes in-store experiences to make shopping more stimulating.  "If you need to get in and out quickly, you can do that,” he said. “But if you want to come and bring your kids and be able to have an experience, you can do that as well.”
Ignoring the fact that consumers continue to be attracted to food retailers focused on the 5 P’s of food marketing. Tim Lowe does not have one concept he says “We have 100 different concepts,”  that Lowes  intends to roll out to additional locations over the next few months.
Here is a list of just some  of the experiences being offered at the company’s concept flagship store:
• A “chicken dance,” in which employees and any willing customers flap their arms and wiggle their rear-ends every time a rotisserie chicken comes out of the oven.
• A “sausage professor” who creates new varieties — such as peanut butter sausage —with the help of shoppers’ children, who get to push buttons and turn knobs to help develop the unusual flavor combinations.
• A “beer den” where customers can sample craft beers and buy their favorites in 64-ounce jugs.
• A “community table” for meetings or cooking demonstrations.
• A “pick and prep” area, where customers can select the produce of their choice and have it cut, trimmed or chopped to their standards by store personnel.
• The name of a local street instead of a number at each checkstand to keep the emphasis on local — a theme carried throughout the store, with more than 2,500 local products for sale.
The Ready-2-Eat and Heat-N-Eat fresh prepared food niche continues to expand too C-stores, Chain Drug stores, Liquor stores, new non-traditional outlets, and of course restaurants. How many concepts are you focused on? Here is one clue: When food retailers build a maze, they end up with footprint malaise.

Invite Foodservice Solutions® to complete a grocerant program assessment, grocerant scorecard, brand, or product placement assistance.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869  Linkedin.com/in/grocerant or twitter.com/grocerant